NFIB

Creating a Long-Term Plan, Part II
04/ 01/ 2002

A noted TV talk show host once interviewed five 100-year-old people. When these centenarians were asked the secret of attaining their age, several commented that, when they were young, they envisioned themselves becoming very old -- not just 70, 80 or 90, but 110 years or more. They said that if they had thought of themselves as living a shorter amount of time, they might not have made it to 100.

The same can be said, in ways, for a business. But what are the traits of such a business? And how can you plan now for your company's longevity? Today's Workshop, by contributor Jeffrey Moses, continues last week's discussion on the topic. And remember, planning for the distant future just may help your company flourish in the short term, when you personally will benefit from and enjoy it.

1. Plow money back into your business whenever you can. For instance, instead of taking cash out to buy a new surround-sound TV/CD/DVD system for your home, consider putting the money back into marketing, office equipment, or employee benefits. Always try to keep moving your business forward, while making sure that you have enough reserve cash on hand to fall back on during financial difficulties.

2. Be extremely cautious and prudent when selecting strategic partners, either individuals or companies. A good partnership forms a synergy that is more than the sum of the parts, and can position you for long-term stability and growth. A bad partnership can bring down both companies. Forming partnerships requires experience. The best place to start gaining this may be through some of the numerous excellent books on the subject. The following are a few available through Amazon.com and other booksellers:

* Partnershift: How to Profit from the Partnership Trend, Ed Rigsbee, Edwin Richard, Hardcover, 2000, about $25.

* Alliance Advantage: The Art of Creating Value Through Partnering, Yves L. Doz, Gary Hamel, Hardcover, 1998, about $25.

3. For your company to stay in business 100 years (or even 30-40), you'll need at some point to choose a successor to assume leadership. This means that at least one person will have to become acquainted with every aspect of your operation. Every company that exists from generation to generation has gone through a transfer of power. Often, in smaller companies, family members assume leadership. But frequently other capable employees are elevated to the top position or key employees are brought in from outside the company. Training someone so that he or she is capable of taking over isn't a bad idea for any company. If something should happen to the top person, the business would be in for a rocky ride without a firm, knowledgeable individual able to step in at a moment's notice. For smooth and efficient transfers of power, it's necessary to begin training potential leaders well in advance. Here are a few books on this extremely important but often neglected subject:

* Another Kind of Hero: Preparing Successors for Leadership, John L. Ward, Craig E. Aronoff. Paperback 1992, about $17.

* CEO Succession: A Window on How Boards Can Get It Right When Choosing a New Chief Executive, Dayton Ogden, et al. Hardcover, 2000, about $23.

4. Always think long term. When making a decision, consider how it could affect your company's performance 10, 20, 40, and 50 years in the future. Can a person really plan for 100 or more years in the future? I doubt it. The best way is to follow each of the points presented in today's and last week's Workshops, and let them mount up over the long run for successful growth and lasting profitability.

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