Updated September 3, 2016 . AmFam Team
You’re a business owner, and that’s something to be extremely proud of. You’ve worked hard for everything you’ve achieved. And now with all those years of hard work behind you, it’s time to start thinking about what’s next. Because you’ve dedicated too much to leave the future of your business to chance.
A well-built business succession plan puts all the pieces into place. But there’s no such thing as a “one-size-fits-all.” All small businesses, and small business owners, are unique. So, you need a plan built just for you. Let’s take a look at how to make that happen.
Whether you’re building a succession plan for your family business, a non-profit, or a corporation, the process can be broken down into a workable number of practical steps. It’s ok if your plan doesn’t follow this exact path. You didn’t get where you are by always going with the flow. But the following five steps provide a great guide for putting together a personalized plan that can keep your business dreams alive — for generations to come.
Determine your why. Ask yourself why you’re thinking about a succession plan. Are you pondering retirement? Thinking about passing the business down the family line? Maybe you’re just considering new strategic directions. Whatever your reason, having a clear idea of why will help you with the what.
Set your timetable. The earlier you know when you want to shift control, the more time you’ll have to ease that person into the position. No need to rush. It took years to get here, so take your time moving on. Experts say you should start the succession process 15 years before you intend to step away. Not all plans will take that long, but it’s still a good idea to give yourself the time you need.
Choose your successor. Wisely. This is a big one. Choosing who will carry on your company’s good name is not an easy decision. If it’s a family business, that decision can be even tougher. Or maybe not. Maybe you’ve always known who’s best suited for the job. But in most cases, help from an impartial third party consultant might come in handy.
Develop a training program. You can’t just hand over the keys to the company without first teaching the new owner how to drive. Identify critical functions and have your successor learn these areas inside and out. Give them to chance grow, learn and make mistakes. The more ready they are, the better you’ll feel when you finally let go of the wheel.
Prepare yourself. With all this planning don’t forget the most important part of the entire process — you! Prepare yourself, mentally and emotionally. A great way to move on is to think about what’s next. Plan your travel. Pursue a passion. Start your next business venture. Whatever you do, do it fearlessly. If your succession plan is solid, you should be able to hand the company over and start your next chapter with confidence. Good luck!
Want to learn more about protecting your business dreams? Your American Family agent (Opens in a new tab) has the answers you need!