Coaching restaurant owners on succession planning
By Dr. Stacy Feiner
Proactive succession planning is fundamental to owning a successful restaurant business. The term succession planning is a term used by many industry experts, but refers to very different concepts: leadership transitions, estate & tax planning, “key man” insurance policies, strategic business planning, legal agreements and financial planning, to name a few. It's important for businesses to develop a succession planning strategy that unites each of these elements to ensure that decisions are perfectly aligned to achieve leadership goals.
WIND IT UP:
As restaurant leaders begin to think about exiting and transitioning the business to new leadership, they should be winding up—not winding down. Restaurant owners should focus on positioning their businesses for long-term success before the transition occurs, in addition to identifying ways to increase their companies’ value while they are still in the driver’s seat. This process is a strategic one, requiring an emotional, physical and capital investment. This long-term transition strategy is anything but business as usual. Just as if a restaurant owner were to roll out a new software system, launch a new product, or build a new plant, they would need to make a capital investment and add new resources to ensure that these desired expectations are achieved throughout the transition period. Planning is the best way to ensure the business owner’s desired ROI is baked in to their succession options.
BUILD BENCH STRENGTH:
A restaurant's current business is the wealth engine for the future. It must be protected first, and deliberately grown second. With this in mind, succession planning is about more than just who succeeds the current restaurant owners—it addresses every other position in the company. Developing employees for new roles as the company grows makes the company agile, flexible and adaptive; the very traits required for growth and change. To do this, restaurant owners must know their talent as well as they know their numbers. In fact, numbers are lagging indicators of performance. If restaurant owners want to improve their bottom line, they should turn their attention to their people, developing the know-how, intelligence and processes to attract the right talent, provide them the tools they need to be productive, and advance them into new roles. Building a sound talent management system can help leaders obtain a working knowledge of talent resources across the enterprise. Additionally, this approach helps leaders create an environment that fosters employee engagement, encourages people to do their best work and prepares the workforce to handle challenges.
Succession planning is a much deeper, more nuanced process than it might appear at first blush. That’s why restaurant owners need to enlist a team of both internal and external resources to ensure that no aspect of the plan goes unaddressed.
Don’t go at it alone. Use the transition as an opportunity to ask yourself: How will my success pave the path to future prosperity?
Dr. Stacy Feiner is an executive coach for the middle market, and director with BDO Management Consulting. Stacy brings psychological strategies that help business owners improve performance and advance their organizations. Her methodology addresses complex dynamics within owner-operated companies, family businesses, management teams and boards. She coaches leaders on how to solve people problems that clear the way for driving strategy, growing profitability and eventually transitioning to the next generation. Stacy is a licensed psychologist, executive coach, author and national speaker. Her latest book is, Talent Mindset: The Business Owner’s Guide to Building Bench Strength.