Succession Planning Process

The following tips ensure a smooth transition from one generation to the next.

  • Start off with a succession plan.
    Build an exit strategy into the first business plan. The earlier one begins succession planning, the smoother the transition will be.
  • Involve family in business succession planning.
    A discussion process is critical for a successful succession. Take into consideration personal feelings, ambitions and goals of family members.
  • Select the best successor.
    Examine the strengths of all successors and what is best for the business. Look for who has strongest skill set and interest.
  • Not everyone needs to have an equal share.
    It may be fairer for the successor(s) to have a larger share of ownership than non-active family members. Or it may be best to transfer both management and ownership to the chosen successor(s) and make other financial arrangements to benefit the other family members or children involved.
  • Train your successor(s) and work with them.
    Successful ownership transitions occur when successor(s) have been trained for a year or two before they take over.
  • Get expert help with succession planning.
    Ask a family-business succession-planning firm, as well as lawyers, accountants, and financial advisers to assist in facilitating the process of working through succession plan issues.

A good succession plan ensures that you'll have the funds necessary to retire, or start a new venture, and guarantees that the business you built thrives under its new leadership.