Succession planning is critical for every business, whether you are a small business owner yourself, or are preparing for a CEO’s lateral move. Knowing how your company will respond to a top-level vacancy can keep your company on track and prevent a cascade of resignations. If you missed David Stanislaw’s recent online workshop, Business Succession Planning: Ensure Your Company’s Future, here are some top tips you can take away and use to plan your business’s next era.

Tip 1: Start Your Succession Planning Earlier Than You Think

Most business owners put off business succession planning for too long. An effective succession planning process often starts 5 years before the owner or executive retires. Some begin even earlier, so that they will be prepared for the unexpected. This leaves enough time to thoroughly examine your business’s corporate vision, strategies, and needs, and to find and train a highly qualified candidate to act as a business successor.

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Tip 2: Understand Your Key Employees’ Professional Goals

Often, especially in family businesses, there are assumptions about who will carry the company forward after an owner or president retires. However, sometimes these assumptions are made without considering the employee’s personal goals or career plans. If the founder’s son or daughter is automatically seen as “next in line for the throne” that can interfere with determining whether they are a good candidate for the job, or whether they want it in the first place.

Tip 3: Put a Price Tag on Succession Planning

Another common mistake business owners make is forgetting to consider the financial cost of a leadership transition. This could include planning for their own retirement. However, it also includes budgeting for recruitment, training, and onboarding. If you intend to sell your shares in the company when you step down, establishing the cost may also include getting a business valuation, so your successor can begin to develop a financial plan of their own to buy you out.

Tip 4: Consider What Makes Your Industry Different

Every industry has its own considerations for business succession planning and ownership or management transitions. For example, businesses with professional licenses, like doctors’ offices or law firms, may have limits on who can take ownership. Meanwhile a family farm must consider the costs of the land and variable profit margins year to year. Be sure to customize your business succession plan to reflect your own industry, rather than simply applying a one-size-fits-all template.

Tip 5: When in Doubt Get an Objective Perspective

Perhaps the biggest tip for business succession planning is that you don’t have to do it alone. If you are the founder of your company then you likely don’t have a mentor to see you through the transition. A business consultant to guide you through the process, perform interviews with key employees, and facilitate business succession meeting. Because the consultant is not a part of the business, working with one gives you the advantage of an objective perspective, as well as experience with the process. A business consultant can also work with your management transition team, providing continuity before and after you retire. That way you know the company’s vision is safe.

David Stanislaw is an organizational development specialist with over 25 years’ experience helping developing business succession plans. Contact us today to meet with David.