Let’s imagine for a moment that you’re walking down Main Street. You’re headed to your favorite store to go shopping or get a tasty treat; or let’s say you’re calling your regular service technician because you’ve got a broken appliance or a plumbing issue at home.
When you get to where you’re going or hear the tone on the phone, you realize that the business has closed its doors and is no longer operating. Isn’t that frustrating and deflating? Don’t you miss those businesses, either for convenience or preference? Don’t you wonder why the business closed its doors?
Sometimes businesses close their operations because, though they may seem to be operating successfully, they are not financially sustainable.
However, there are also several very successful businesses that close their doors because they have not properly planned for succession of the business to the next generation. They may be banking on an heir taking over the family business, an opportunity to sell the business, or they may not have any plans. Either way, it’s poor management to not have something in place that will guarantee the continuation of a successful business when it’s time to retire or in the event of an accident or death.
It is essential that successful businesses are passed on, not only for the businesses, themselves but also for the continued success of the communities that they serve and operate in. There are very few trade businesses in Southeast Colorado, and it’s scary to think that if these businesses don’t have a plan to continue their services after retirement, that the community may be left with no options other than calling someone from Pueblo or Colorado Springs, which means more expensive services.
This is even more perplexing considering we live in a high poverty area, meaning that having to pay for more expensive services will likely cause additional hardship or the repairs to simply not be done — leading to dilapidated housing and building, something that already plagues our communities.
Agriculture is another industry in which this happens quite often. It’s becoming harder and harder to be a small farmer or rancher, as larger operations have bought out the smaller farms, and these commercial sized farms and ranches are able to invest in better technology (or take bigger risks) that allow them to do more with less, and keep growing.
Often, farmers and ranchers either don’t have someone to pass their operation along to. They are hoping an heir will take over but that heir doesn’t want anything to do with the farm anymore. Or maybe or they have a willing heir but it’s never been a priority to pass on the necessary knowledge for the next generation to be successful.
In all these situations, the small farm loses another farmer/rancher, and the commercial farm gains more acreage to build their empire upon.
Another issue that complicates these scenarios is the lack of education and experience of the next generation. If a business owner wants to hand his or her business to the next generation, but there’s no one qualified to do the work that wants to do the work, then that creates a workforce supply/demand issue. The business owner most likely will just close their doors so as not to have to deal with the headache of watching their life’s work go down the tubes in the hands of an irresponsible, unqualified and unprepared novice. This is a deep-dive topic that I will discuss in a future article discussing workforce development.
So, how do we tackle issues regarding the continuance of businesses in our communities?
Wikipedia defines succession planning as the process for identifying and developing new leaders who can replace old leaders when they leave, retire, or die. A recent article that I read, written by Robert Half, speaks about not only succession planning for business owners but also for employees throughout all levels of the organization. His article states that the process is critical, but often overlooked, that’s necessary to ensure smooth operations.
When there is succession planning built into the entire organization, it leads to staff retention, which always is a good thing. Another article, written by Michelle Mikesell, discusses the importance of ongoing succession planning with constant review and refreshment of details to ensure that the best people are prepared for the right positions.
The importance of succession planning cannot be overstated. And there are so many resources that are available throughout the Arkansas Valley that can aid in the process of implementing a logical succession plan into your business or operation. The Bent County Development Foundation is one of those resources, and I’d love to speak with you if this article has struck any chords.
If you’ve poured your heart, soul, and passion into your current business, you owe it to yourself to ensure its survival long after you’ve exited the workforce ... so please come talk to me.