Succession has commonly been thought of as for the purpose of retirement. While true, it is also a way that you can open your company up for a new opportunity. Every business should have a succession plan in order to carry on into the future. What if succession planning was a way to benefit your business? A strategic approach would do just that and help you not only survive but thrive.
Savvy business owners have a succession plan ironed out in order to prepare for the possibility of a sale or merger, for example. Studies show that over 50 percent of business owners plan to make some kind of significant changes within the next three years. Thus, a succession plan is essential.
Entrepreneurs like to create their own destiny and seek to fulfill themselves. They often miss the importance of succession planning. Successful ownership transitions are possible, but a strategy is needed to make it happen.
Try the following to implement a succession plan:
When something is your own, it’s hard to be realistic at times. Ask for objective opinions from someone that would follow the parameters of your business.
In order to have the right succession strategy for your business, you’ll want to get wise counsel from your lawyer, accountant, coach, and banker. Sometimes business owners have some people in place but not all the right people in place. Don’t hesitate to surround yourself with wise advisors. Try to cultivate these relationships and partner with those that understand your business model.
Succession plans often have family members involved. This is normal, but owners should be mindful of what is best for their company rather than allowing their emotions to be a driving factor in decisions.
Consider the experience level of those in your family. Do they currently work for you? Are they interested in a promotion or a change? Be sure family members have the capability to handle a role in your succession plan.
Bottom line, a succession plan is an essential part of your business model. You will want to have a strategy for changes, merger, and the like. If you have a plan in place, you will have an easier time during transition.
Succession plans are not just for retirement. You need one for the changes that come along while running a business. Be sure to get wise advice and be realistic about family members. You can create a dynamic plan that will help your business succeed for years to come.
Written for us by our associate Gary Sorrell, Sorrell Associates, LLC.
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