What is your long-term plan for your business? Don’t think exclusively of where you want to take the company while you’re still involved. What is your plan for when you want to retire or step away?
For some, the plan all along has been to sell the company and retire with the earnings. For others, though, they see the business as something that can grow and flourish long after they step back in their own role. They may even want to leave it to a family member as a long-term source of income. To do all of this and more, the key is to do business succession planning.
Choosing the right person
Perhaps the biggest benefit of succession planning is that you actively get to choose who will take over for you when your role has ended. Because they’re hand-picked, you know they can do the job well. You know that you share a vision with them. You know that they want to do it.
All of this is far better than just generally leaving your business to your heirs. They may argue over who gets to run it, what roles they should have, who gets to make decisions and much more. They may even disagree about what you would want. A succession plan eliminates these debates by giving them more direction.
Furthermore, you should ideally choose and work with the successor before you leave them the company. Planning doesn’t just mean picking them and setting up the legal structure — as important as that is. It also means showing them how to run the company, answering their questions and allowing them to get real-world experience.
On this end, succession planning is also best for the company, not just your family. Many businesses falter and eventually fail after the founder leaves. If you plan properly, your business can thrive and even grow after you’re done running it. This is best for your employees, customers and all others involved.
Do you have the right plan in place?
If you have not yet done any business succession planning, it’s time to consider all of the steps you can take and the options you have.