Developing A Business Succession Plan

As your business grows, you should consider how you can best continue it beyond the first generation of leaders. Devising a formal plan outlining who will own and operate the company when you and your business partner are no longer able or willing to do so is crucial to long term business profitability. Although no one approach is right for every business and situation, the following five steps can help you focus on the most important issues.

1. Choose your Successor Wisely.

This can be difficult, because you are in a sense, hiring your replacement, and it is hard to know whether a particular person, be they a coworker or a family member will be able to pick up where you leave off. Choosing a successor is not meant to be an overnight process. Intensive effort, including an examination of all employees with the potential skill and ability to lead in your stead is required, and you will most likely wan to seek advice from your board of directors or a search committee assembled for this purpose. Even if you are currently not in the position to have a board of directors, it is still important to give the idea of a successor some careful planning and thought, as experts recommend that you begin planning your succession plan fifteen years before you anticipate retirement.

2. Develop a Formal Training Plan For Your Successor.

In order to adequately train your successor, it is important to identify the critical fundamentals of your company, and have your successor work in each of the areas in order to gain experience and become immersed in the business of your company. Remember that a certain amount of “letting go” will be necessary, since it is important to let your successor make their own mistakes and decisions.

3. Create A Timetable.

You should actually focus on setting up both a training timetable and a timetable for shifting control of the company to your successor. A timetable will whelp to motivate both you and your successor, and help them complete their training program more quickly and successfully as well.

4. Ready for Retirement.

You should also outline a plan for your successful transition from employment to retirement by beginning your retirement early. This may involve recreation, travel, community services or other business ventures, particularly as your successor takes on more and more responsibilities.

5. Transfer Control To Your Successor.

Install your successor in your lifetime and allow them to carry out the role that they have trained for. Remember that ultimately, your successor is responsible for their own success. You can provide advice and training, but ultimately, your successor’s decisions will determine the company’s future. This, if nothing else, is why it is so important to choose the right successor.