Your most significant responsibility as a business owner is to plan for the future of your business. Unfortunately, most successors ruin good companies. The decision as to who succeeds can be its reason for success or failure. Sadly, most family-owned businesses don’t survive to the next generation because of a flawed succession plan.
A good succession plan will turn your business into a thriving enterprise. Such take care of your retirement as it transfers powers to an able successor.
How to Find the Right Successor
Take into consideration the crucial aspects of your business when analyzing potential successor. Consider the following:
Skills before relationship
When handing over businesses, the first option most people consider is family members. Tempting as it may seem, resist the urge of letting relationships be the determinant. Instead, focus on skills. If there’s no-one with the desirable skills to take your business to the next level internally, consider an external candidate.
Make a list of desirable skills you require in your successor. Focus on the experiences. In case your ultimate choice is a family member, make it clear to them what their roles and that of other family members are.
If your preferred candidate lacks some skill, you might want to consider preparing them. Though hectic and time-consuming, the process of grooming a candidate is an excellent course. Start the process early enough. The grooming process can include:
- Management skills training
- Introduction with clients and other stakeholders
Before succession, ensure there’s a smooth day to day operations in the hands of your potential successor. Ensure you pass on your leadership skills and ability to run the business smoothly, even under tight situations.
Where necessary, consider empowering women, minorities, and persons with disabilities. Your focus shouldn’t be on specific levels only, try out developing talent across the organization. You might be surprised at how much skills your team has.
For a Smooth Succession
Create a structure that brings together your team and guide the business throughout the transition. Your mission statement should spell out the core values and goals of the company. It should also include provisions for a smooth transition.
Remember to include experts. Attorneys, insurance experts, CPA, financial advisors, et cetera are key people who shouldn’t miss in the process. Where necessary, make retention of worthy employees a priority. Ensure such tools secure their positions as employment agreements.
Ready for a Change?
Whoever succeeds can be a reason for business growth or failure. Planning in advance who will take over your reins is, therefore, vital. Ensure the exit and handing over the process is smooth by following the steps above.