How To Build Small Business That Outlives You

Only 20% of small businesses outlive their founders.

What a shame!

This is especially sad when you consider the effort and resources it takes to build a business, only to see it all crumble when the owner becomes absent.

The truth is that no business owner wants his or her business to die when they retire or are appointed into public service or suffer a health challenge.

They’d like the business to go on and prosper.

But to make that happen goes beyond just wishing for it, it takes hard work, foresight and structure that many small business owners are unfortunately too busy to handle.

If you want to build a business that can live on after you have left it for whatever reason, here are a few tips that would help you put things in place to achieve that goal.

Tips For Building A Small Business That Can Outlive The Owner

1. A Vision Of The Future

2. Plan For The Future

3. Build Processes & Systems Into Your Business

The best time to start building a business to outlive the owner is when you start the business, the second-best time is right now!

Businesses that exist long after the founders are gone are a testament to the effort of the founder to go beyond handling daily business operations, to preparing the business for a future where they would be absent.

Below, we share three (3) tips for building businesses that outlive the business owner:

1. A Vision of The Future

The process of building a sustainable business that outlives the business owner starts with the business owner.

The business owner needs to be able to envision a future where he or she is not an active part of the day-to-day operations of the business and prepares for that reality.

When the business owner is short-sighted or refuses to accept the reality, the business suffers because it was not built to exist without the business owner.

2. Plan For The Future

Every small business needs to have plans in place to cope with the future.

Having a business plan is critical, but to plan for a scenario where the business owner or one of the business owners is no longer a part of the business, the business also needs a succession plan.

The succession plan outlines the steps the business would take to be transferred from the owner to new management.

And it is not only relevant when you’re dead.

When you get an appointment to public service or retire – a succession plan is important to help the business maintain the business’s smooth operation.

The succession plan typically contains the key roles that would need to be replaced, your successors and how the transition should be carried out, etc.

3. Build Processes & Systems Into Your Business

For a business to survive and succeed after the exit of the founder, it has to be able to run without the owner even before his or her exit.

This is why many small businesses don’t succeed because they are built around their owners and need the presence of the owner every day to operate.

Your small business needs to move away from owner dependence by building structures, processes and systems that would help it operate well without the owner.

  • Institute Corporate Governance – The first thing many small businesses lack is a corporate governance structure. A good governance structure ensures transparency and accountability. Having a board of director provides the necessary oversight and ensures that the business is steered through tough times like the exit of a founder, for instance.

 

  • Hire The Right people – Having the right people and skills to fill critical positions in your business is important. Without good people, your business cannot survive, talk more, succeed. So, make sure you’re hiring people who are a great fit for your business, invest in them and give them the sense of responsibility to your business to prepare to take up roles when the business requires such.

 

  • Systems and processes – For your small business to outlive you, it has to have documented processes and set systems that make it easy to run even in your absence. It’s like a chef who wants to pass the knowledge of his vegetable soup to his children. The best way to do this is to carefully document the ingredients and steps it takes to prepare the soup. If you want to learn more about how you can build systems for your small business, read this article.

Small business owners must begin to think about how their businesses can succeed without them.

It’s not often an easy process, but it is necessary if the business must survive its absence.

If you need help to build a small business that can outlive you and still be profitable, we recommend you contact the SME Coach today!