The Big Idea with Ron Davis
9 Steps to Succession Planning
Ever since I was a wee lad, I have been fascinated by how time seemed to stand still when you are waiting for a big and happy event in your life. And, then again, how fast it seemed to run as you got older. The events of your adulthood move by in a flash until one day, you wake up to find that it's almost all over.
Don't worry, I'm not going to get morbid on you, nor is this about the concept of life or death. Rather, this is about mygreat idea.
Tie Up the Loose Ends
What has prompted me to usurp this space normally reserved for a security dealer's idea, is that I am more than a little bit despondent over the fact that people I know in the industry are getting ill, sometimes critically, and even dying.
When that occurs, the security dealer who has worked all of his life to build a business for his wife, children or estate has now passed on, and no one knows what to do next.
When helping security dealers sell their companies, I have received a significant number of inquiries from people who are the dependents, beneficiaries and estate holders. Many have a vital interest in knowing what the now-deceased owner of the business meant when he put a few papers aside that told people what to do in the event of his death.
Here's the thing: If you run your business as though it will never end, you will be doing all of the things that will protect your business in the event that you can no longer run it. Here is a small checklist of things you should take care of before it is too late:
- Maintain a file on every customer and make copies of originals. There should be a record and history of service calls and other events related to that customer.
- Original contracts should be kept in a deposit box or safe somewhere offsite.
- Discuss the plans that you have for the company with key people.
- Talk with a lawyer and an accountant about succession of your company.
- Bring an industry attorney into your business to review all of your documentation and paperwork. Get advice and follow it!
- Leave instructions with whoever is next in line to run your business. That person needs to have a systematic procedure of where you have kept everything that's pertinent to your business.
- Have a will on what you want done with the business.
- Bring in a financial guy that understands a cash-flow business (i.e. RMR) and can help you make decisions as to what it is you want done with your business, regardless of today's size or strength in the market.
- If your business is being passed down to children, make sure that you leave instructions as to how, when and under what circumstances an heir can take over the business.
If you do some of these things today, the next generation won't have to worry about who to call when a middleman is needed. The decision won't be based on fear and it won't be based on incorrect information, but rather, the fact that you have prepared the next generation to take over in a logical manner.
Click here to read the original article in Security Sales & Integration, October 2009
Ron Davis is Security Sales & Integration's "What's the Big Idea?" columnist and contributing market analyst. He is president of Davis Group, a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates International in the 1980s.