According to the latest Ottawa Chamber of Commerce Business Growth Survey, 22 per cent of local family-owned business respondents plan to exit their business within the next five years. But only 11% have a well-documented succession plan.
It’s no wonder that the Institute of Family Enterprise Advisors states that fewer than 30 per cent of family-owned businesses will survive into the second generation. The use of a small business advisor could make the difference between failure and survival.
There comes a time when every small business must move beyond, or simply outgrows, the capabilities of its founder(s). It’s a sign of success but could be the root of impending failure. If you have been diligent about hiring and developing your own replacement, then the future may look bright. However, if time, money or opportunity keeps preventing you from taking care of the ‘bigger picture’ then it is time to consider outside help.
Bringing in an external small business advisor may feel uncomfortable. A first step in the right direction is to engage an expert to help optimize your processes through periodic reviews. Some initial “quick wins” are your legal, accounting, and financial services.
For example:
- Your lawyer does not have to charge you by the hour for routine resolution, certification, search or minute book maintenance. If framed correctly, your request for these services can be fulfilled for an economical flat annual fee.
- You already maintain accurate financial records. With a revised set of mutual bookkeeping terms of reference and expectations, you can significantly reduce your annual CPA bill.
- Your current financial service provider is likely overcharging you (particularly for cash management services). It costs nothing for a look around for a better deal and very little to actually move.
To separate emotions from where your small business needs to be in the not so distant future, the collective knowledge, resources and capabilities of either an external small business advisor, embedded business services or an advisory board can be invaluable. Start building the relationship and enjoy some quick returns now while preparing to pass the torch in the future. Think about it (perhaps sooner rather than later!).
This article was published more than 1 year ago. Some information may no longer be current.