How to Begin Succession Planning

What are you really working for? Is it to build a legacy brand or to secure a restful retirement? In actuality there is no reason why you can’t accomplish both of those goals. From the moment we start working we look forward to the day when we can stop working.

Perhaps you have a bucket list that includes traveling, taking up a hobby or just reading every day. Whatever your retirement plans might be you want to make sure you the kind of financial security which will allow you to maintain a decent quality of life.

As for your business, you don’t necessarily want it to come to an end just because you’re ready to scale back. When it comes to your succession planning here are some of the steps you can take to be ready.

1.      Plan Ahead

Just as you plan on retiring some day from the moment you start working, you should also be thinking about how your business will carry on when you move on. This doesn’t mean finding a successor in the first year of your operation but it should be something that is always in the back of your mind. You might identify a particular executive who has the right stuff to take over some day. If so, you could start to groom them so that they can be ready to be a CEO.  Just don’t keep your intentions a secret. If you’re going to invest your energy into an employee let them know what you’re thinking. That will have them on the same page and working towards a common goal.

2.      Build the Right Team

As you already know, starting a business is not something you can do on your own. The same holds true for your succession. You need the same accountants, lawyer and advisors you used on the way up for your exit.

3.      Last Will and Testament

The worst case scenario would be for your business to carry on without your input because of an untimely death or debilitating illness. This is why it is essential for you to prepare a will. There might actually be a requirement in your corporation bylaws which states you have to have this type of document in place. Estate planning will allow you to designate the representatives you want to have in charge of your business. Keep in mind that there will always be opportunity to amend the document as conditions warrant but it’s best to have that foundation in place. This is also the reason why you should have a comprehensive insurance policy in place as well. Benefit payments could help with the continuation of a business.

4.      Think About Your Family

Many businesses become a family legacy with the ownership being passed down from generation to generation. Although noble, that isn’t always practical. If you do have children who you would like to take over the business make sure that is something that want to pursue. That last thing you would want is to force them into a career they have no passion for.