Succession planning doesn’t need to be complicated. Here are a few thoughts about how business owners can achieve greater success and clarity as they develop their own business succession plan.
When I develop an executive search for a business owner, I encourage the owner to develop a growth strategy and plan for the business. The strategy and plan have several common elements –
- Forward focus – the plan should project company growth at least 5 to 7 years and include essential company measures, including but not limited to financial projections, key performance indicators, customer distribution, employee size, market emphasis, sales strategy, technology, and competitive analysis.
- Hiring an executive – does the owner need to hire an executive to implement the growth strategy and plan – or is there a successor already employed by the business who can assume the executive role?
- Owner role – the business owner should determine her/his role in this strategy, essentially indicating how the owner will transition from owner to key advisor. Often, I characterize this as “moving from the driver’s seat to riding shotgun.”
- Type of succession – does the owner want to sell the company to an outside buyer, merge the company with a competitor, create an ESOP with company employees, or offer the hired executive an opportunity to purchase the company? These are only a few options.
There are certainly more detailed thoughts and considerations for business owners when developing a succession plan. Owners should be encouraged that there are numerous advisors who can ably assist in the development of the succession plan.