08 Oct Key Employees are Critical to the Long Term Success of Your Business
The long-term success of your business will be greatly impacted by your ability to recruit and retain the next generation of business managers/owners to your company.
The majority of closely held business owners are baby boomers between the ages of 50 and 70. The total baby-boom generation represents approximately 79 million people. The next generation (Gen X) are those currently in the age group from 30 to 50 years old. That generation is only 49 million people. This significant difference in population between the Boomers and Gen X will have a great impact on future ownership and management of closely held businesses.
There are not enough Gen Xers to fill all of the roles and positions in closely held businesses. This is causing intense competition for the Gen X management talent required to operate businesses.
While baby boomer business owners are contemplating what they will do with their businesses, the next generation of talent is also contemplating what their future will be with the company they are currently working for. You can expect that your key people will test the market and look for the best opportunity for their future.
Therefore it is critical to have a key employee plan that demonstrates how your key people will share in the financial growth of the company they help manage. This plan needs to clearly show the key people who are helping you manage your business, how the company’s business plan and your key employee plan are going to work together to help build a long-term successful business.
The purpose of this planning is to create a clear picture for the next generation of business management and ownership about where the business is heading and how the key management is going to help the business get to that destination.
The bottom line, KEY EMPLOYEES ARE CRITICAL….You’ll need to keep key employees who can successfully operate the business without the owner’s daily management. They will need incentives to remain with the company, regardless of who the?owner is and they want to know how they fit into the company’s future plans.