It’s business; it isn’t personal. And like so many other aspects of running a business, succession planning leaves little place for emotions. In order to plan and orchestrate a transition of leadership in your small business, it pays to start well in advance. Before you plan to retire, it won’t hurt to get more than a decade’s jump on these decisions and then anticipate the need to revisit them as things may change over the course of that time.
Succession planning for each business comes with its own unique set of considerations, so one standard agenda won’t work uniformly for all small and family-owned businesses. However, there are some good guidelines toward a streamlined succession plan that work across all business models:
- Plan your departure and what you will do after you retire from the business. When it comes time to relinquish control to another, this may help you do so.
- Decide on a successor. Consider all employees within your business, leave emotion out and look for the right set of skills for leadership. A consultant outside of the family who is impartial may be a beneficial resource to employ.
- Formally train the chosen successor and consider allowing them to make mistakes in order to learn from them. Outline the duties critical to the job you do as a business leader. Identify all primary functions of the company and ensure your successor spends time working in each of these areas in order to obtain an exhaustively thorough understanding of all inner-workings, not just the executive level obligations.
- Create a transitioning timeline and do so in such a way that he or she is gradually and smoothly moved into the position. Begin significantly reducing your decision making and allow more of his or her decisions to carry final weight.
- Step aside and retire. By exercising due diligence during your lifetime as a business owner, you are likely to have properly and adequately prepared for a transition with minimal turbulence.
Remember that many small businesses fail due to inadequate planning for the owner’s departure. By developing a plan early on and impartially finding the right person for the job, looping back around to re-evaluate and revise earlier considerations that may be obsolete or less effective, you minimize the hardships that come and set your company up for successful longevity. A Detroit business succession attorney may prove to offer invaluable guidance as well.