ROSE Gray, the founder of the River Café who died earlier this week, is a loss to UK gastronomy. Gray’s passion for Italian food was embodied in the business she founded with Ruth Rogers in 1988. The Michelin-starred restaurant is sure to survive the loss of one of its founders.
But her death should give those who have set up small businesses pause for thought. What happens if – heaven forbid – one of the founders dies, or has to leave?
Although it can be difficult to plan for such an event, especially in the early days of a business, there are two things entrepreneurs should remember, says Chris Jenkinson, founder of Jenkinson & Associates, a consultancy that specialises in small businesses.
Firstly, think about creating a “will” for your business. A strategic plan for the future is important to get down on paper as soon as possible: “Part of the business plan will be targets and budgets, but another part of it should be your exit strategy,” he says.
An effective exit strategy should be drawn up by a lawyer and include contingency plans in case a partner leaves or passes away, says Jenkinson. It should clearly state whether the company will continue to exist or will be sold. If the plan is to keep the business running, then your exit plan should include a hiring strategy to replace a partner. For example, is there someone else who works in the business who could be promoted to take over the role? Or, if you need to hire an external candidate, decide what type of person you are looking for and what skills or personal qualities are required.
Secondly, put in place an effective marketing strategy as soon as financially possible. Many start-ups rely heavily on their founders at the beginning. If personal contacts are used to secure business, then this can cause problems if a partner leaves or dies. But if you have a marketing strategy in place, then you can source new opportunities outside of those secured by personal connections.
If the mark of success for an entrepreneur is to build a strong enough business so that it can live on without them, then Rose Gray was certainly a success.