Are you a family business owner? If so, do you intend to create a legacy through your business? How will you ensure your business survives long enough to be able to pass that legacy on to your successor? The information below will give you insights into what you must do to ensure your business survives for decades, if necessary.
If you don’t consider yourself a family business owner, but rather, are just building a profitable business, you will still want to consider the insights below for your business, too.
The process of creating a lasting legacy for your family business is a labor of love. When you started your business, you had a vision—a dream of what your business could become and what that would mean for you and your family many years hence. You have poured your heart and soul into making that vision a reality. You have seen challenges and successes over the years, yet through your passion and belief in your dream, you have persevered and are now beginning to enjoy the fruits of your labor.
There are many factors that go into ensuring that such a legacy is properly structured to endure for future generations. Some are fairly obvious and some can remain hidden. Reviewing all these factors for business success and potential risk—and mitigating that risk now—can ensure that each is given proper attention over the life of your business.
A business sustainability assessment will identify and assess the potential risks and opportunities that contribute over the long term to ensure you reach that point of your retirement. The business sustainability assessment is an in-depth, systematic review of key factors that ensure enduring success for generations to come.
Business Sustainability Assessment
The business sustainability assessment is comprised of three levels of key risk factor identification and assessment, each level successively building on the findings of the previous level. The major areas of potential business risk are business foundation, the core of your business, and your assets:
- The assessment of the foundation of your business is a deep examination of why you are in business, your dream for your business, and what you need to ensure the realization of that dream.
- Overarching Guidance: Why are you in business?
- “End Point” Vision: What do you see as the “exit” point of your business, and when?
- Critical Success Factors: What must your business be, do, or have to successfully thrive for decades in order to meet this goal?
- The assessment of the core of your business is an in-depth examination of the “how” of your business—specifically, how you create value for all your stakeholders, ensuring profitable returns over an extended period of time.
- Organizational Effectiveness: Specifically, what is your leadership style, and how do you manage innovation and creativity?
- Organizational Efficiency and Productivity: How do you ensure the return per employee capita meets or exceeds the industry average?
- The Scope of Your Value Chain: What are all the ways you create value for all your stakeholders?
- The assessment of your business assets reviews the key assets of your business and how you grow and develop these assets over time. This would ensure they endure over the life of your business, yet keep pace with all the changes your business will go through over the decades of its life.
- Relationships: What are your primary business relationships (your business ecosystem) and how do you manage them?
- Resources: What resources does your business utilize and how are you managing those resources?
- Planning for the Future: Looking forward, what do you anticipate will need to change over significant time periods?
- Other Considerations: What other factors do you feel will contribute to your firm’s long-term viability?
You may take this assessment to whatever level you feel most comfortable. The starting point is the assessment of the foundation of your business. The result of working at this level is that you will have an explicit statement of the business legacy that you have chosen to leave. You will also have a detailed identification of all the key success factors that are required for your business to achieve that legacy.
If you choose to go into your business more deeply, the assessment of your business core will build on the findings of the assessment of foundation to examine all critical value- and profit-creating aspects of your business. This will ensure you provide a solid foundation on which your business can thrive for decades.
Finally, if you choose to take this last step, the assessment of assets will review the key assets of your business that are vital to achieving your business legacy. This review will ensure that your plans to maintain, upgrade, or replace these key assets are sound, effective, and timely.
It is your choice how deeply you elect to review your business and its requirements for enduring success in achieving the legacy that you desire. We encourage you to conduct your business sustainability assessment at all three levels, but you may work at your level of comfort and need.
Conducting a business sustainability assessment can help you very successfully reach your business legacy goals and, ultimately, create your dream for your business legacy.