Succession Planning for Startups or How to Make Yourself Useless

Do you know that you should be planning your death before you start the business? What happens to the business?   Plan every day for your eventual retirement.

Multiple Revenue Streams

Have multiple revenue streams so that you’re not always chasing after new customers. With my coffee roasterie, we have wholesale, retail, cold brew coffee by the bottle, specialty markets, coffee catering, online shopping cart, Carefree Coffee Club, coffee by the cup, and more. So, if the weather is nasty and retail is slow, my customers  can still buy coffee at the various specialty markets. If the weather is nice, customers will be flocking to the cafe and to all of the restaurant and cafe accounts that we serve. Give your employees ownership of the many different sources of revenue. Teach them how to create new business for you.

Take Care of Your Employees

In order to get on the right path, you need to pay your employees better than they expect to be paid, within reason and depending on your cash flow. In addition, you need to educate them on how to be you- that is, having the passion and joy for the business and your customers. The employee needs to know that you care about them personally and for their future. They’ll fight for you if you take care of them. You need to educate your employees with the idea and dream that you want to be useless. By useless, I mean that if you died (grim, yes, but true) the business would survive and thrive.

Teach them how to manage other employees in your absence. Designate who is in charge when you are not in the shop. I had an employee, who we’ll call Greg, who had a serious accident many years ago- he was in a coma for months. He had a serious closed head injury and he’s working hard with physical therapy to rehabilitate his body and mind. I had an interesting problem- he would follow through when I was present and I requested his help, but when I was not in the shop, he wouldn’t listen to my other employees. The reason was that he didn’t understand the chain of command. Regardless of whether you have an employee like Greg, designate who is the leader in your absence. Mentor that employee concerning managing people effectively.

Constructively criticize your employees with kindness. Correct even the smallest errors with words of encouragement and teach them what the objective and endpoint is for each task. With your employees, as with your children, you educate them to make great decisions when you are no longer present.

Imagine that your business is a franchise or that you intend to sell it

Is your business model so clear and powerful that you could sell it? Are your business processes so strong and unique that customers often ask, “Are you thinking of franchising this idea?” If all of your systems are clear and steady and there is accountability built into the systems, you, the owner, become less necessary.

What are the specific steps taken by employees when they receive new orders? They should answer the phone in a certain way and ask certain questions that help you grow your business and add value to the conversation, and they should have complete knowledge of what they are selling.

How do your employees greet customers? What are the questions that you expect them to be able to answer? Do they have the training to answer all of the usual and extraordinary questions possible? Train employees and model expected behavior and they will not need you around. If you wanted to sell your business, you would need to write down your vision statement as well as your mission statement.

Delegate, Sit Back, and Allow your employees to make mistakes, then correct them

When you know how to effectively run your business smoothly, slowly delegate all of your responsibilities to employees. Give them small morsels of responsibility until they’ve absorbed all of it. Then set them free, allow them to make mistakes, and resist the urge to “help” unless they’re getting into trouble that will hurt your business.

Educate your employees about your finances

Yes, teach your employees about the business, about your vision statement, and mission statement, but don’t neglect to tell them about the financial state of the business. Is your business in the midst of a cyclical downturn that causes poor cash flow? If yes, your employees should know that. It will impact their spending habits. They should be involved in the debate concerning just-in-time purchasing that assists with cash flow or whether there is enough money to gain greater purchasing power and lower prices with bulk purchasing. Show employees your P & L statement for certain months and share with them how they have helped to positively impact the bottom line. Treat them like shareholders in the company and share your vision for the company and create strategies and tactics to help them realize that vision.

Payroll is the toughest beast to control in any business. Pay too little and you have a disgruntled workforce. Pay too much and you will probably have lax employees, lower earnings, and you may not be able to pay yourself. However, when you point to the percentage of the company’s earnings compared to the payroll, and if you share with them what payroll needs to be for the company to thrive and survive, then you’ll have better employees. They won’t be lax with overtime and they’ll understand how much one hour of employment costs the company. Your employees will have some compassion on you because they understand how many hats you wear every day. Employees trust owners or managers who respect and trust them. If you are so secretive with your financial statements, you are either embarrassed by the numbers or you don’t trust anyone. Tell your closest business friends what really is happening financially in your business and you will learn that they had or are now having the same problems. It takes one secretive owner to ruin a business, but it takes a village to create a successful business where the owner transitions into the role of visionary.

Write a Job Description for yourself!

What do you do, exactly? Here are a few jobs that I currently do part-time or full-time:

Coffee Roaster, Salesperson, Green Bean (unroasted coffee beans) Purchaser, Social Media Marketing, Communications Director, Barista, Coffee Caterer, and Part-time bookkeeper.

After you write the job description for your “job” as owner of the company, look for ways to delegate those positions to your employees that take you away from the vision that you set forth.  Do you know what happens when you multitask? You become the master of nothing.

So, I’ve hired an assistant coffee roaster so that I can sit at my desk and grow the business or leave the shop and create some sales opportunities. This hire created peace in my life because I have more time with my family and more time to write books. I am also the master of social media for my business, but that’s a job that would take a tremendous amount of instruction because no one has my sense of humor or my passion for coffee- yet. Eventually, I’ll hire a green bean purchaser so that they can fret about coffee prices, availability, and quality. I hardly ever brew coffee for customers, work as cashier, or answer phones. My employees act as a buffer so that I may grow the company, dream about the future, and do things that make us money and help the community.

Take the job description that includes every task that you have owned and begin to slowly farm it out to your trusted employees or to other businesses. When you have sensitive computer files, intelligent people create multiple backup files to ensure the safety of that information. In the same way, create many different backup situations and jobs for the many tasks that are crucial for the success of your company. The result may be an increase in payroll, but you will be able to remove yourself from the daily grind. Go write a book. Spend more time with your family.

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