10 Day Sprint – Day 10 – Succession Success

Well how best to end this sprint but by talking about your legacy and how to successfully move on when the time comes to exit your business.

As you know, planning is essential for success. But what you planning for the future of your business beyond your own involvement?

Whether you plan to sell, pass it on to your children, or look to make it succeed in other ways, effective succession planning is critical.

First is your business independent?

We don’t think twice about the importance of having independent parties in our lives. Imagine you got hit by a car and the police officer is the brother of the person who hit you and the judge hearing your case is his dad.

Or you step into a restaurant with a big sign saying inspected and cleared by the Chef’s cousin and grandmother.

And yet the importance of owning an independent business is overlooked when it comes to succession.

When you own an independent business, you have much more control over your own destiny. You’re not reliant on anyone whose conflicting interests could cause you trouble. Instead, you can propel the business to meet its goals and objectives, making decisions that are in the best interest of you and the business.

Assuming your business is independent, (if it’s not reach out to me today) here are some tips for effective succession planning that will help you secure your future, and that of your business.

Start early. Succession planning should begin early – ideally, as soon as you start your business. This will give you time to develop and refine your plan and make any necessary adjustments along the way.

Develop a plan for transferring ownership. This should include a clear timeline, a valuation of your business, and being proactive on due diligence and what will be needed to make a smooth exit. I’d suggest start building a “data room” from now so you will not have to scramble when the time comes. And of course, don’t forget tax implications and other legal considerations.

Identify, train and mentor potential successors. Whether it’s a family member, a key employee, or an external buyer, identify potential successors and begin grooming the internal ones for the role. Train and mentor them to ensure they have the skills and knowledge they need to run the business effectively.

When the time is right, communicate your plan to key stakeholders. Sometimes you will have to keep things close to chest (especially if you are planning to sell), but when the time is right have a clear plan on what and when to communicate so you can help ensure a smooth transition and maintain the trust and confidence of all involved.

Finally, and it goes without saying, ensure you have a business that can be passed on. Don’t get stuck “owning a job”. Businesses like that, where they rely on the owner to make all the decisions and to keep things running smoothly are not attractive to buyers nor to most owner’s children.

These are just a few succession planning items to keep in mind. By implementing these strategies and making succession planning a priority, you can help ensure the long-term success of your business, yourself, your legacy and most importantly, provide peace of mind for your loved ones.