As a business owner, you have probably put a great amount of effort into the success of your business. However, have you considered how your business’s success could be impacted by your absence?
Without a succession plan in place, your business could struggle after your retirement or death. Without planning or clear direction, there may be no one with the skills needed to step into your shoes. Alternatively, there could be squabbles over who will replace you.
If you have not yet begun a succession plan, you are not alone. According to a recent Forbes article, almost 60% of business owners do not have a succession plan. However, your business’s success may not continue beyond your involvement if you do not create a thoughtful succession plan while you still have plenty of time to implement it.
Determine how to best exit your business
There are several ways you could exit your business. For example, you could:
- Become a co-owner
- Sell the business to an employee
- Sell the business to an external party
- Pass the business on to a family member
It can be valuable to consider all of your options and the potential impacts they could have on the business. You might also consider the legacy you want to leave and which options support that vision for the future.
Plan for transitions throughout your business
It may be shortsighted to think that your position is the only one that could negatively impact the business if left unfilled. Often, there are many positions that are important to a company’s success. You may want to identify these positions and include them in your succession plan. Consider how you might replace crucial leaders if they retire, leave the company or are promoted within the company.
Set a timeline
Consider when you want to retire and how long it might take to train in your replacement. These and other factors can affect the timeline of your succession plan.
Many businesses plan to implement their succession plan over a five-year period. However, unexpected hiccups in the process could set your ideal timeline back. Although it can be valuable to identify your ideal timeline, it is generally better to begin work on your succession plan sooner rather than later, so your business can be prepared to handle any challenges that can come up along the way.
Businesses often struggle with leadership transitions. However, creating a thoughtful succession plan is one of the best ways you can help your business continue to thrive beyond your involvement.