Business Succession Planning

What is business succession planning?

Building a successful business will take years of hard work and dedication.  Once you have established your business, it is important that you take steps to protect its legacy.  An unexpected death of the owner or manager of a business could destroy the company if a succession plan is not in place.  With

“Authentic brands don't emerge from marketing cubicles or advertising agencies. They emanate from everything the company does...” (Howard Schultz, CEO Starbucks)

Whether you take coffee or not, most people are familiar with the Starbucks brand. Not every company is a renowned franchise like the international Barista. Branding , however, is essential for every small business. A brand helps customers identify a company's products and services and distinguish them from the competition.

Brands, Logos Trademarks

A company's brand stands for its reputation, and this is often a matter of customers' perceptions. Customers need to know who you are and a brand identity helps to clarify your target customers. Having an effective brand strategy allows a business to communicate with customers in a variety of ways.

Often, this starts with a logo or a trademark which serves as the basis for packaging, the domain name of a website, media communications, as well as advertising and promotional materials. Having a trademark, moreover, requires registering that mark with the US Patent and Trademark Office. This is a complicated process that requires the advice of an attorney in order to prevent a trademark infringement lawsuit that could possibly damage your brand.

 There are a number of steps a small business needs to take in order to develop its brand. The first is to define the brand and its purpose so that you capture the interest of customers. One way to do this is with a "mission statement" that explains what your business stands for and what your products and services do.

Once your mission is established, the next step is to identify your target market. Not every customer will be drawn to your product or service. However, there is a customer base that is likely to buy from your business, especially those that identify with your brand. In the end, your target customers will decide whether or not your brand has value.

Lastly your brand must have a personality and represent your values. The values of your brand are the core principles that foster relationships with your employees, customers and vendors. Ideally, these values should be the foundation for a positive business culture. Put simply, a brand is important to a company and its products and services much like someone's personal or professional reputation is to him or her. 

Your brand tells customers what to expect from your products and services and distinguishes you from the competition. Your brand strategy is essential for communicating and delivering your message which is really a promise to your customers. In other words, a brand flows from who you are, influences customers' perceptions and allows them to identify with you. Ultimately an effective brand strategy can give you an edge in the market place.

If you are considering starting a business or have already done so, an attorney can advise you on legal matters affecting your business.

Will Your Company Have a Future Without You?

If you are running your own business you are probably very focused on the here and now, making sure your business is running well and avoiding (or getting through) the many obstacles it faces. But you should also think about the future, because the future will happen whether you are prepared for it or not.

One thing to consider is succession planning which outlines the transfer of leadership in the event that you leave your company by choice (perhaps to start another business or retire) or suffer serious injury or death.  

A recent Inc. magazine article states that a Deloitte survey found:

• Nearly 90% percent of business leaders realize their company’s success depends on proper leadership succession, 

• 13% are confident with their succession plans, and 

• 54% stated lack of talent has damaged their companies.

To help plan for succession:

• Define what type of leader your company needs. What type of skills and behaviors are needed to run it? What specific actions will a new CEO need to take and what knowledge and experience will be needed to succeed? 

• Identify job specific assignments linked to business strategy which can help to prepare this person, in addition to useful feedback to make sure the person is on the right track. 

• Define how leadership talent will be promoted and identify high potential employees formally as those with potential. Give worthy candidates training, incentives and added authority.

• Track the development of needed skills. Measure candidates' problem solving and decision making skills, a candidate's emotional intelligence and his or her ability to negotiate and navigate problems with employees, customers and outside partners. 

If you are not the sole owner, succession planning should include buy sell agreements between those with ownership interests. If one party wants to sell his or her share, to whom can that interest be sold and for what price? A mechanism needs to be worked out so if a part owner is leaving the company, he or she (or his or her family) will be treated fairly.

If you own a business and want help preparing for its future, call business law attorney Sanjeev Kumar at (512) 960-3808 to schedule a consultation today.