Most people don’t like to dwell on it, but the truth is that you won’t be around to handle your business forever. It might sound morbid, but in reality, the reason you leave your accommodation business behind could be a happy one. Some people decide they no longer want to spend so much time and effort running a company as they age; others decide it’s time to travel. Still others live for the thrill of bringing a business to life; once their hotel or motel is successful, they’re ready to move on to another challenge.
Whatever reason you have for wanting to pass your accommodation business on to someone else, make sure you take time to invest in succession planning.
What Is Succession Planning?
Succession planning involves all the activity involved in transferring your position or business to another person or company. Whether you’re handing the keys of your hotel off to an adult child who will take over the family business or you’re selling everything outright, succession planning lets you ensure the shift is seamless for employees and customers.
Some common steps in succession planning include:
- Choosing someone to take your place. If you’re selling the business to someone else, the person or entity you sell to effectively takes your place. While you don’t have any control over how they treat your business after the transaction is complete, you do have control over who you agree to sell to. If it’s important to you, choose a company or individual who seems to have a management and customer service philosophy that matches yours.
- Create a written account or policy about any tasks that you handle, especially if no one else knows how to do them.
- Make yourself redundant by training others to handle all the work you typically do. It will take the new owner time to figure out the business, and having staff who can handle many of the responsibilities keeps everything running smoothly in the meantime.
- Communicate your intent to trusted staff, especially those in leadership roles. Morale and work ethic remain stronger when employees aren’t surprised by sudden changes in the organisation.
- Go through all your legal, employment and financial paperwork to ensure everything is in order. You might not need this paperwork during a sales transaction for the business, but it’s just good form to hand over a well-ordered ship to the next person in charge.
Why Is Succession Planning Important for Accommodation Businesses?
Succession planning is important for any business, but in the accommodation world, it can mean the continued success of the brand. Hotels, motels and other hospitality businesses rely heavily on the goodwill of the customer, and that goodwill can be put at risk by major changes.
While most clients will return to a well-run hotel despite an ownership change, if there are issues during and just after the transaction, it could mar the business’s reputation on platforms such as TripAdvisor. A few bad reviews or poor customer experiences as the guard changes can impact bookings for months, if not years. The goal should be to create such a smooth transition that many customers never realize management or ownership changed.
Specific Succession Planning Tip for Accommodation Business Owners
One thing that accommodation business owners might have to consider when succession planning that other business owners don’t is where they will live. Many hotel and motel owners live onsite; if you sell the business to someone else or pass management duties along, you’re likely going to need a new place to live. Plan well ahead of any succession to ensure you can move out of the hotel or motel without impacting any sales deal. If you don’t have a place to live and hold up the deal, the buyer might find a more attractive business deal, leaving you running the hotel for longer than you intended.
To set your business up for a seamless transition, work with professionals such as lawyers, brokers and financial advisers well before you intend to leave the business. Experienced professionals can help you plan for the future of both your brand and yourself.
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