Succession planning is strategizing the process of changing ownership when a business owner or entrepreneur reaches retirement, changes careers, or passes on. Succession planning ensures your business continues to operate under capable leadership according to your preference.
Creating a succession plan helps a business maintain optimal daily functionality during the transfer of ownership, whether you promote an employee from within or choose a family successor.
You’ll find that a succession plan is advantageous when going through a voluntary or involuntary exit from your business. Read on to learn how you can develop an effective succession plan.
Plan Ahead to Finance the Succession
I create financial projections for my clients to determine the revenue needed to fund the transfer of ownership and advise you on pursuing the most necessary professional resources for cost-effective efficiency. For example, partners in a company may obtain life insurance to name one another as beneficiaries, providing the finances to purchase the company’s share if one partner passes away.
Choose a Successor Who Aligns With Your Vision
The success of your successor will depend on how they align with your personal preferences, stipulations, and professional goals. I use assessments to help my clients understand what is most important to them so they can identify a fitting successor.
If you have established a family business, choose a family successor who is willing to learn and is capable of leadership. If you are promoting from within, an employee should demonstrate leadership abilities and acquire extensive knowledge about running your company. Ideally, you’ll have a list of potential successors in order of preference.
Leadership Development
Your co-owner, family successor, or employees should undergo leadership development and skill training. Additionally, they should begin managing more responsibilities with minimal supervision for a successful succession process. I create performance plans and use key performance indicators to measure and confirm progress in the productivity and development of my clients.
Develop Company Culture
Improving the performance of your employees and successor will be enhanced with a company culture conducive to growth and transformation. I provide my clients with a team-building exercise to use in a values action plan to foster collaboration, effectively communicate shared goals and purpose, and more.
Operations Management
Business owners should strategize optimizing daily operations, workflow, and processes for expense reduction and the streamlining of company processes: your successor will experience more advantages in inheriting an optimal functioning company and learn about operations management upon assuming leadership. I use my experience in continuous process improvement to help clients improve efficiency.
Use a Strategic Approach
Include a strategic plan to improve operations management, cultivate higher productivity, achieve the goals of performance plans, and more to achieve the most valuable goals on time.
Business owners who wish to begin building an effective succession plan can book a consultation with me today.
