How to Succeed in Construction: Succession Planning for Business Owners
Growing a business is like maintaining a bonsai — it takes way more work than you could ever expect, and if you do it right it’ll be around long after you’re there to care for it. While you can pawn your bonsai off on any willing neighbor or green-thumbed niece or nephew, succession planning for a business is far more complex.
As a part of our tireless service to Minnesota construction professionals, we have helped many business owners develop effective succession plans to accomplish any number of business and personal goals. Below, the team at MNCLS will walk through some of the key components of an effective succession plan to ensure your business has the best chance of succeeding — and flourishing — after leaving your hands.
What’s In a Succession Plan?
Before you hand over the metaphorical (and literal) keys to your business, you’ll need a strategy to determine how the transition of power will go down. This strategy will help you make sure that all the right pieces are in place, and is a living thing; it may (and should) evolve as your business does.
While a succession plan is primarily focused on ensuring your successor is in place, it is also focused on the overall health of the business. Changes in leadership and organizational structure can be hectic, but a succession plan tailored to your goals can keep the ship running smoothly in even the choppiest of waters.
Make Sure Your Succession Plan Accomplishes These Goals
Succession planning is not an overnight process, meaning construction business owners with the right foresight will have plenty of time to prepare for their departure. This time can be spent building a comprehensive plan and transition timeline, but it can also be spent maximizing the value of the business. By optimizing the value of the business, owners can give their business a better chance of success under new leadership — while also ensuring both they and their family are looked after financially.
Plan for All Levels
The primary goal of a succession plan might be to establish a direct successor, but a comprehensive plan with the success of the entire business in mind should focus on all levels of the organization. Stepping up to the top job is no small feat, and this training will take time — as will the training of a successor, and others whose roles may evolve with this transition. While the goals of the business may stay the same under the new leader, its approach may be different, and this shift may be a prime opportunity for employees to assume new responsibilities.
Keep Your Business Competitive
Can your construction business stay competitive in your absence? If so: how? Answering both of these questions will be integral to the succession planning process, and identifying key ways to improve the competitiveness of your business will help make the transition smoother. This can be done by creating a strategic budgeting process alongside your successor, or even exploring other business entity options as the business evolves.
Meet Your Needs
No matter the circumstances surrounding your departure from the business and your planned succession, your relationship with the business you built is far from over. Thorough succession planning will clarify the financial needs of you and your family and include your personal wealth management and investment strategy — ensuring the investment in blood, sweat, tears, and time you made in your business stretches as far as possible.
Succeed With MNCLS
A succession plan isn’t built in a day, and it isn’t built alone. In addition to working directly with your crew to map out the future of your construction business, having a team of experts in your corner can make a world of difference. MNCLS knows what it means to be a construction business owner, and understands the ins and outs of the law — meaning we can help you build a succession plan that protects your business and preserves your legacy.