Today could be a good time to think about what you want to happen when you leave the business you own. You may have no plans to do this anytime soon, but establishing the framework for this transition now can give you and those who work for you a great deal of confidence in the future.
What should you have in your plans?
A business succession plan refers to a strategy for handing over the reins of your business when you pass away or retire. These plans can tackle a range of issues, but three of the primary components will include the following:
- Who will take over? Naming the person or people who will take over in your place is a critical element in succession planning. You want to identify this party so that they – as well as partners, employees and other interested parties – know what to expect.
- What happens to the business? A business succession plan should reflect what you want to happen to your business when you leave. Some possible outcomes include selling it to someone else, handing it down to an heir or closing the doors.
- How do you plan to help future leaders? Business succession is not a light switch that you just flip when you depart. Getting future leaders ready for their roles can be a lengthy process. A solid plan should have guidelines regarding training the appropriate parties, recruiting people, and developing skills and knowledge.
These components can be incredibly valuable during times of transition.
Make planning a priority
You may be the bellwether at your company; others look to you for reassurance and information about where your business is heading. Upon your departure, there could be a great deal of instability and distrust unless you have already taken steps to protect your business and ensure it continues operating the way you want.
Running a business is not just about what you do today; it’s about what you see happening in the future. Looking ahead can help you anticipate and overcome challenges that could derail your company or lead to financial losses.