Identifying Your Successor / by Kerri
Identifying Your Successor is about Securing Business Continuity.
Many if not most business owners avoid, postpone and in the end fail to plan for their business continuity in the event they can no longer work due to death or illness.
- They all have the naïve theory that they’re too young to worry about succession or retiring or their exit strategy.
- They all assume nothing will ever happen to them. If they don’t think about the ‘what if’s’ – they can’t happen…
- They don’t bother to create a business succession plan to address an unanticipated event such as disability or death – which can occur any time.
Ideally, every business owner should start planning their succession, working themselves out of a job from the outset, even in their business plan. It’s never too late to start today.
With an eye for hiring, grooming and cultivating successors in various aspects of the business, the strengths of the founder can be instilled wide and deep throughout the organization.
For small and medium size business owners, the business is a primary asset they will need to liquidate to fund their retirement.
If you intend to sell the business to a third party – becoming detached from the day-to-day operations is a straightforward strategic process to maximize the financial gain. But if you wish or intend to keep the business in the family, your choices for successors can shift or be constrained by family requirements, needs and politics.
Succession planning is the responsibility of the owner, not the management team or the next generation. Develop the succession plan in sync with the owner’s transition plan to balance the best interests of the company with all its employees, vendors and clients; and the requirements of the exiting owner who needs capital to fund the rewarding lifestyle he deserves as the fruit of his labors.
Succession planning is only one piece you need in place for a strong integrated business plan including operations planning, transition planning and contingency planning.