Owner Expertise-based businesses face a unique Succession Planning Situation
Prevention is better than cure in knowledge-based businesses
To grow a valuable business – meaning a business you can sell eventually – you need to structure your company so that it is no longer reliant on you.
Easy to say, but what if your business is something like a PR consultant or plumber, that revolves around selling your expertise?
To scale up a knowledge-based business reliant on owner expertise so the business can continue after you leave it, you first have to impart your knowledge to your employees, so they can deliver the goods, too.
However, it is difficult to condense years of school and on-the-job learning into a few weeks of employee training. The more specialized your knowledge, the harder it is to delegate work to junior employees.
The key to succession planning for a service business can often be found by offering the proactive service that prevents customers from having to call you to solve a problem.
You have to shift from selling the cure to selling the prevention.
Fixing what is broken is typically a hard task to teach; however, preventing things from breaking in the first place can be easier to train others to do.
-It takes years for a dentist to acquire the education and experience to successfully complete a root canal, but it’s relatively easy to train a hygienist to perform a regularly scheduled cleaning.
-It’s almost effortless for a real estate manager to hire someone to clean the eaves trough once a month, but repairing the flooded basement caused by the clogged gutters can be quite complex.
-For a master car mechanic, overhauling an engine that has seized up takes years of training, but preventing the problem by regularly changing a customer’s oil is something a high school student can be taught to do.
-For an IT services company, restoring a customer’s network after a virus has invaded often takes the know-how of the boss, but preventing the virus by installing and monitoring the latest software patches is something a junior can easily be trained to do.
When you’re selling owner expertise, it can be tough to rely on your team to do the work for you.
As ironic as it sounds, sometimes the key for succession planning is to expand your own personal capacity by offering a preventive service, providing the time for you to mentor your employees. Some of your employees can focus on providing preventative services while you train others to step up to your level of expertise. This maintains your business income and provides the opportunity to increase the value of your business.
The value of your business will increase with less dependence on your owner expertise! In contrast, think of the phrase “a lynch pin company” where the owner is the pin. Pull the pin and the wagon goes out of control!
Make sure you are teaching your employees every day, don’t wait until a crisis.
Prepare your employees now to provide the services your customers need and reduce owner dependence.
Transferring your knowledge WILL put more money in your pocket when you decide to embrace your “Life Beyond Business.”