Building A Legacy
Do most entrepreneurs set out to build a legacy when they start their company and business?
Possibly not.
Usually, someone has a brilliant idea, a lightbulb moment, a spark that drives them to try and bring that idea or product to fruition. Oh, and ideally make money along the way, which is often a key factor to get through the blood, sweat, and tears it takes to become a successful entrepreneur. After all, most aren’t just doing it for their health and a giggle.
But once a business does become successful, how do you build long-term value and create a lasting impact beyond your lifetime that will positively impact future generations?
Some family businesses see the founder of said business never actually realise real success. They just planted the seed and those inherent family ties continued to build on the foundations set in place at the beginning. It’s later generations that see the rewards of the early labour and hard toil.
Family-run businesses also often have that drive to make something bigger than the instigator originally envisioned, to improve lives beyond their own family. It goes beyond providing adequately for the family and grows into something else.
Building a legacy is more than being in it for the money. It’s more than building up a business and selling it on for a tidy sum of money too.
So, how do you create a business with legs? A business with a legacy that will benefit future generations, beyond your own blood relations? It’s about caring what happens next.
Start By Planning for the Future from Day One
This might sound ludicrous, but it’s imperative to know how you want to end your business even as you’re just starting out.
Are you positioning this business as a venture you will expect family to inherit eventually and work for in the interim? Will family come before more qualified individuals?
Nobody expects every start up to know the answers to these questions when you’re at the starting gate, but they should be present in your thoughts when you spend time planning for the businesses future. [Note: At Tricres, we recommend spending 10% of your work time planning for the future of your business. Check out our blog post here to understand why this is more relevant than ever.]
Succession Planning Is Essential, Not Optional
Succession planning means that you don’t leave the business in a mess like a ship without a rudder and an empty tank.
There are plenty of things to consider when it comes to having a rock-solid (and legally binding) succession plan. What happens when the founder exits? Are there multiple owners? Will anyone else want to leave when the founder does as a result?
Who will run the business when the founder leaves and what will be the process to choose a successor?
Anyone who has watched the show ‘Succession’ knows this is a loaded issue, dotted with landmines and pitfalls, people who may react angrily or feel unprepared for the burden. Dramatic license aside from the TV show, it can cause businesses to implode without the proper strategy and planning in place. Let the show be a warning of how NOT to exit a globally prominent business dynasty.
Plans can change and need to be updated accordingly too, so be sure to revisit your plan at least annually.
Can Your Business Run Without You?
It needs to be able to function successfully without you at the helm.
Whether you choose to have a family member run the company or someone externally, their drive and passion may vary from your own.
The business should be able to function even when you are no longer there, and it should be able to function without you before you have exited and be competent and successful. If the owner exiting means everything falls apart at the wheels it’s a recipe for disaster.
Involve and Inform Successors Early
You don’t want to plan and prepare, get legal papers in order, and then find out when your chosen successor is told of your plans it’s crickets.
It shouldn’t be a surprise to whoever is chosen, or you risk someone unprepared for what is to come. They should ideally be involved and understand your vision as well as discuss their career trajectory and whether or not they see this as the ideal route for their future. If they only accept out of obligation it will be unlikely to end well.
Look Outside the Family When Building a Legacy
It may be that nobody in the family wants to run the business. They may still be owners, but it doesn’t mean that they are the best qualified or even interested in doing the job.
There may not be any heirs to the throne so to speak either, so thinking about choosing someone who is aligned with your Purpose, Vision, and Values is essential if you want your business to continue to thrive, benefit society, improve culture, and advance others however your product or service does so.
Improving and impacting the culture, community, and customers should be the end goal of a business legacy.
As a business owner, being accountable for the advancement and the success of others will help define your leadership in building a legacy respected in business.
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