Planning for succession is critical to the success and longevity of any business, and there are many options to choose from. Do you want to keep ownership and put someone else in charge? Do you want to sell the business to someone who works for you? Is there a family member who wants to take over? What about your real estate? Will you sell the building with the business, or rent instead?
Many auto shop owners consider succession planning an afterthought they don’t need to worry about until they are ready to retire. Unfortunately, the unthinkable happens far too often, leaving family members and your employees in a difficult situation with no guidance on how to proceed. Many businesses facing these uncertainties cannot move forward when the owner can no longer be a part of the daily operations.
Having a plan is not just about preparing for retirement. It’s also about the comfort of knowing that your business will run exactly how you want it to when you’re away for vacation or if the unexpected happens.
Here are the Automotive Training Institute’s top eight tips for creating your shop’s succession plan:
- Start early: Identify potential successors early and start preparing them to take over key roles in the organization. This will help ensure a smooth transition when the time comes.
- ASK if they want to be a shop owner: Too often, owners assume family members — or one of their technicians — want to be the next generation of shop owners, only to be disappointed when the time comes to pass the mantle and they don’t want it. Have those conversations early and often as life circumstances change for everyone involved.
Get ATI’s FREE Succession Flow Chart to help you identify the best players to perform the most critical responsibilities while you’re away from the shop. Click here. - Build a successful and profitable business: I know this sounds like a no-brainer, but many auto shop owners can feel like having just enough is good enough. When it comes to selling your business or handing it over to someone else to run for you, you have to have a model that works well, with a customer base that keeps coming back.
- Develop Standard Operating Procedures (SOPs): Identify critical roles and create step-by-step instructions for carrying out your most important routine operations. SOPs aim to achieve efficiency, quality output, uniformity of performance, and operational compliance. They are the “playbook” for how you want things done in your shop. A well-developed SOP manual not only makes onboarding new employees easier; it has financial value in the sale of your business.
- Encourage leadership development: Everyone in your organization will benefit from leadership training. Encourage leadership development within the organization by providing opportunities for education, experience, and coaching on leadership. This will help potential successors develop the skills and experience they need to be successful in their roles.
- Communicate openly and honestly: Be transparent with your successors and shop staff about the process, timelines, and expectations. This will help build trust and confidence in the plan and ensure a smoother transition. A change of ownership can make your team feel uncertain; the more they are aware of the process going forward, the more secure they will be.
- Continuously review and update the plan: A succession plan should be a living document that is regularly reviewed and updated to reflect changes in the organization, its leadership, and its goals. Continuously evaluate the plan's effectiveness and adjust as necessary to ensure its success.
- Build a Board of Advisors: This can include your spouse, trusted friends, fellow business owners, your accountant, your lawyer, and your business coach. Sit down and talk about what you want the future to look like for you and your shop. Get a wealth of advice from people who may see things from a different perspective or know your blind spots.
It takes time and planning to move your business from a job you own to being the owner; it takes even more time and knowledge to prepare it for the next generation. Start planning today for what you want your tomorrow to look like! You — and your family — will be glad you did.
About the Author: Charlene Parlett, AMAM, CEC, and PFP, is a Certified Profit First Professional, a former shop owner, and has been coaching since 2014. Charlene helps clients find the right solutions to their challenges and encourages them to make the changes that result in having the life they dreamed about when they got into business ownership. ATI's 34 full-time, certified coaches, including Charlene, have helped ATI's members earn over $2.5 billion in return on their coaching investment since ATI was founded.
