Grant Stapleton, the entrepreneur behind Baker's Delight in NZ, and co-owner of the Hue colour salons talks to Gill South about succession planning.
A succession plan regardless of business size is an important issue to tackle for any business. You will often hear leaders of businesses and sporting teams use the phrase:
"Start with the end in mind." New Zealanders by nature are very entrepreneurial. We often start with an idea, garner enough enthusiasm to get this idea off the ground by working long hours and drawing enough to live whilst reinvesting into our growing businesses.
It's at the time we decide to sell our businesses that we tend to realize the years of effort that we have put in.
I ask myself a number of questions when looking at a business:
1. What are the drivers that make customers buy these goods and services?
2. How big could this business become and over what time frame?
3. Who would want to buy this business in the future and what are the attributes that would make it highly attractive to a purchaser?
4. What are the possible exit options and at what time in the lifecycle of the business?
Get the structure right
At the beginning of your business you should ensure you have a sound financial and legal structure. If you are in business with other people, including family, a shareholders agreement is essential. The correct commencing structure will not only protect the business from possible risk but also make it more attractive to a prospective purchaser.
Who can help you build your business?
Along the journey of owning your own business you might like to ask yourself:
Who has an interest in seeing my business succeed? An obvious answer may be suppliers but there may be others as well. It may in fact be a competitor who may want to acquire your business once it is proven or gets to a certain size. These are the people who can help you build your business and may also be the very ones who want to buy your business at some stage.
The future for your business
Even with the best laid plans, business does not always play out as planned.
What business are you really in? What's your competitive advantage? Think about where it could be in one,five, ten years from now and what are the likely competitors? How will customers buy from you in the future?
If you are a service based company then staff retention and development will form a large part of the value. If you are a product based company - how is technology affecting your business?By Gill South Email Gill