During a client networking session last week, I was asked what is the “best” succession plan…
The answer is quite straightforward – the BEST succession plan is one that is a NON-EVENT.
Let me explain… a successful transition is one with minimal disruption to business activities.
To make that happen, any succession process must be FOUNDER-DRIVEN, ie, you cannot abdicate your responsibilities and leave it to the next generation or extended family to “sort it out”.
Some founders are uncomfortable with the process for a variety of reasons, including:
– They do not want to be perceived to take sides
– They want to preserve family harmony
– They do not want to think about their own life beyond the business
– They do not want to acknowledge their own mortality
– They hope if they wait long enough, the succession issue will ‘sort itself out’
Before working on a succession plan however, you’ll need to ask yourself a few questions honestly:
1. At what stage is your business – startup, rapid growth, stable with systems or stagnant?
2. At what stage is your family – just married with no kids, teenage kids, kids in college?
2. Is succession right for you, or is liquidation/sale outside the family a better option?
3. What are your post-retirement financial needs?
All these and a lot more(go through our succession planning checklist) needs to be considered before you start.
Have a profitable day!
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