If you’re like many business owners I’ve known throughout the years, you’ve poured your heart and years of hard work into building your thriving business. You likely excel at piloting your company, you understand your customers and their needs, and you’re a well-respected leader whose people look to you for inspiration and guidance.
Now and then the question crosses your mind – or a business associate may ask – “Could your company run seamlessly without you?” Or, “What if you wanted to, or had to, step away from your business for any period of time?”
It’s something to consider. Is your company too dependent on you?
Perhaps you’re at a point when your focus is shifting away from building the company around you, and instead intentionally building one that is sustainable and firing on all cylinders on its own.
When your expertise, leadership strategy, processes, and systems are documented and implemented across your company – which then becomes less dependent on its owner – everyone benefits. Leaders gain independence and confidence, decision-making is more efficient, customers experience greater consistency, and you enjoy the freedom to spend your time on the work that is of highest value and energizes you most.
How does a business find itself too dependent on its founder?
Greg Hamann of Truliance Consulting explained it well. “Most founders never intended to create dependency. The business simply grew around them. In the early years, this structure makes sense. A founder makes quick decisions. The company moves fast. Customers trust the individual who built the company.”
Hamann points out several situations that characterize over-dependence.
- Decision authority is centralized with the founder with little involvement of managers, even though they are involved in operations.
- Long-standing customer relationships exist primarily with the founder rather than spread across leadership roles.
- Much operational knowledge of the company may exist only in the founder’s head rather than being documented.
What’s the solution?
A founder-dependent approach may work for a time or for very small companies, but it’s risky, especially as companies grow larger. To mitigate that risk, a business continuity plan provides operational clarity and structural independence. Here’s a simple way to get started:
- Address in writing important aspects of your business’ strengths and weaknesses with and without you.
- Identify and protect what matters most.
- Plan for events you can’t control.
Review my blog for more detailed guidelines for creating your continuity plan and set aside time to do it now. You’ll breathe a sigh of relief once it’s in place. It won’t change the respect and loyalty you’ve earned, your influence, or your value to the company. It will lift some pressure from you as founder and give you confidence that you’ve prepared the company you are building to remain strong and successful, rather than leaving its future to chance.
A business continuity plan is also an important part of an exit strategy, and as with all exit planning, it benefits your business today. I’d welcome the opportunity to answer any questions you may have about continuity planning or help you develop your own. Contact me for a complimentary, one-hour consultation.
Bob Zarlengo is a certified exit strategist and CPA. More than four decades of experience in public accounting, expertise in financial reporting, income and estate planning, and tax compliance make him a valued and trusted advisor to his clients.