Planning for the succession of ownership is often relegated to a low-priority task because the current challenges of ownership always dominate your time. Focusing on the here and now is common, but focusing on the future can assure your ultimate succession and improve business operations. Here are some succession planning steps you can take now that will ease the transition.
Groom New Management
Consider your existing management team – candidates that are capable and interested in taking over. If possible, seek advice from other professional advisors. Candidate evaluation does not have to be the sole decision of the business owner.
Determine a Value
Determine a fair assessment of your business’s value and where that value lies. There are several valuation methods, and the end purpose of the valuation will dictate the approach. Surround yourself with a team of professional advisors who will assist you in fine-tuning your goals and objectives.
Develop a Business Plan
Plan for future competencies necessary to achieve strategic goals. As a complement to determining a value, document every detail of how you would like your company transitioned, include why transitioning your company value would be attractive to your successor.
Planning for succession can be challenging, confusing, and may even be overlooked because you are consumed with running your business. Be smart, don’t tackle this issue alone. Seek counsel from both inside and outside your business. You’ll have a lot more options if you start to plan when things are going well in your business. I95