Now, it’s back to work - the first work day of a brand new year that’s never been touched.  How’s your attitude?  Starting the day with a groan or with a sense of excited anticipation?  I for one vote for looking forward, rather than back.  The best way to do that is to have a clear vision of what you want to accomplish with your business in the new year.  Yes, it’s time for that annual rite of January, strategic planning.

 We are devoting our first working day of the new year to our planning effort.  January is a busy month for us, so making the commitment of an entire day for planning isn’t easy.  However, it is essential!  The most productive time of the year in my experience is the first half, before we are beguiled by warm summer days, children out of school, and just general laziness.  We absolutely don’t want to waste it!

Today, we are trying to accomplish the following:

• Review and validate our vision for our business.
• Determine our business goals for 2008 and make sure they support our vision.
• Develop action plans for each goal.

 It is an ambitious plan for a single day, but we are primed!  To make forward progress, you need to establish a destination, determine a course, then set out on your journey with purpose.   Based on many years of experience, we still firmly believe that, without these important steps, you will just spin your wheels and travel in circles.  With a goal, a plan, and purposeful action, you stand a much greater chance of achieving success.

Let the planning commence!

Have you done the same for your business?  Huh? What am I talking about?

I am talking about succession planning.  Have you done any?

Normally, when I ask my clients this question, the answer is no.  Nothing’s been done.  In fact, they haven’t even thought about it.  In general, many are convinced they will be here forever.

The Reality – there’s a Mack truck out there for each of us.  We just don’t know when or where. 

So my business tip of the day is this:  Think about it.  Then take action.

Succession planning can be viewed in the context of two scenarios.

• Scenario 1:  Who will take over business when I want to retire or pursue other interests?

• Scenario 2:  How does the company run (i.e. survive) if something sudden happens to me?  Or to a key employee?  Here, I am referring to the Triple D threat - death, disability, and divorce, any of which can and will impact the continuity of a business, usually severely.

Statistics say we are more likely to encounter a temporary disabling event (skiing accident, surgery, etc.) than something permanent – like death.  However, don’t make the mistake of thinking that a temporary disability is just like taking a couple of sick days.  What if you are battling cancer and can’t work for 6 months?  Better to be prepared.  Have a clearly thought out, formal plan.

The primary difference in handling our 2 scenarios is the time you have for planning.  Scenario 1 is, by definition, a planned event.  It’s also happier to contemplate, so people are more likely to tackle the planning effort.  Scenario 2 is easier to ignore, but do so at your peril.  Don’t assume everything will keep going effortlessly while you are in traction after that skiing accident and on too many painkillers to think.

Why should you care about succession planning?  Well, if you are considering Scenario 1, you want to get the full value out of the business you created.  After all, it’s your baby.

When considering Scenario 2, company value still plays, but you also have to consider company continuity.  If you are not there, who will run the company, keep it going, maintain the value, maintain the income stream for your family and jobs for your employee family?  Along with selfish concerns, i.e. for one’s own family, you have a moral and ethical duty to think of your employees.  They count on their jobs in your company for their livelihoods and the welfare of their families just as you do.

So, how do you get started?

First, decide to do it.  Commit to developing formal succession plans.

1. Think through your options very carefully.  Who could take over for you, either temporarily or permanently?  A family member?  Key employee?  What information would they need to step in quickly and effectively?
2. Get your advisors involved.  A skilled business consultant can help you with your planning.  Bank on their experience.  They have most likely done this before and can guide you through the planning process. 
3. Formalize your plan.  Document it.  Run it by your attorney.
4. Inform the key employee, the one you designate as the person to take over.  In fact, get them involved in developing the plans and procedures.
5. Periodically, review the plan and update it, particularly if that key employee leaves.

Finally, take great satisfaction in being prepared.  And avoid those Mack trucks!