If you are like most business owners, succession planning is never top of mind. It makes sense because trying to grow your company and keep a stable balance sheet requires most of your focus and energy. This is especially true in California where the high costs of labor and taxes drive up the budget. But, since you are on this page, I assume you are beginning to think about the life of your business after you retire. How can you ensure your legacy thrives after you step away from the business? Keep reading to discover why business succession planning is so important and what steps you can be taking now for the future.
Put Your Final Stamp on Your Legacy
It would be a shame to sell your business or close the company after all you have done to build it up. Setting up a succession plan is your chance to make sure all those years of vision and hard work continue to pay off long after you are gone. It is time to think of the legacy you will leave once you leave the company.
Start thinking about your end game. What is your vision for the company going forward? What is your exit strategy?
Thinking intentionally about the future will help you to surround yourself with those who are capable of executing your vision. And one of those people just might be your eventual successor.
Set Up the Right Structure
Succession is about setting up the right structure, not just who will succeed you. It is about creating a structure that leads to continuity now and in the future.
Finding your successor is only one aspect affecting the continuity of your business. Start thinking about what events could slow down or even stop your business. Then make sure you have the structure and plan to overcome those obstacles now.
Identify Candidates for Succession
Naturally, you will want to identify candidates for your succession and other key players in your business. Prepare these potential successors for their future roles in order to promote business continuity and their individual career growth.
Your internal leaders are less likely to seek more high profile opportunities with your competitors if they are preparing to take on a larger role within your company.
When succession plans fail, it is often because the leader of the company could not step away. Perhaps it is due to ego, insecurity, or they are just used to running the company and cannot let go.
If you want your succession plan to be successful, you need to be intentional about preparing the next in line. You must be fully invested in their growth and support them to get them ready to lead the company.
Create a leadership development program to build future leaders in your company. As one leader promotes, another is ready to take his or her place. Employees want to know what the future holds for them and having a defined path towards upward mobility is crucial to retaining top talent.
Final Thoughts on Business Succession Planning
Most company leaders do not like to think about business succession planning. Letting go of your “baby” is a scary thought. But even worse is knowing that when you step away, there is no course for the future success of the company.
Creating a succession plan is something that can be done in phases. First, ask some key questions such as: “What would the company do if a key leader stepped down tomorrow?” Start thinking about who could step up in such a scenario.
Then think about the future and who could be ready to take over with the right training and support. The last step is creating plans to actually make it happen so your legacy can live on.
If you have questions, we would love to help. Check out our business succession planning services now.