Succession Planning for Businesses

Think Ahead.......

"Prepare for opportunities, don't wait for opportunities to take you by surprise." 

by Daniel Emmanuel 

 

An entrepreneur /Business owner, who had devoted their life to the business, strives for it to prosper long after they have retired.  

 

It's never too early to begin succession planning, particularly when you consider that fewer than half of those expecting to retire in five years have actually named a successor. In order for business owners to ensure their business continues to thrive, succession planning should be a priority that mitigates risks associated with economic uncertainty or a sudden shift in management.

 

In order to avoid failure and wasted resources, it is extremely vital for a small business to develop a clear succession plan that the owner should follow. 

 

Some of the key steps involved in a successful succession plan are:

• Exploring your options
• Keeping the business in the family
• Selecting and preparing a successor
• Planning a management buy-out
• Determining the value of the business
• Selling the business
• Financing the succession plan
• Understanding the tax and legal issues
• Managing wealth to secure your future

However, it is also important that business owners take into consideration their unique business model and adhere the planning based around that.

 

 

Here are some planning tips shared by some experienced and hard-working entrepreneurs:

 

- start planning as early as possible as you never know how tomorrow will turn out for you;

- set defined goals - visualize your ultimate target; 

- involve all stakeholders at all times to be on the same page;

- receive buy-in from all the players to keep everyone happy and motivated;

- objectively perceive the skills and will of your heirs to maintain your business competent;

- remain cold-minded when it comes to crucial decisions;

- create an organizational culture that encourages succession to stand up to scrutiny;

- analyze risks to deal with possible business disasters;

- train your successor to nourish your business;

- keep your plan of succession up to date to make full use out of it.

 

So, when it's time to hand over the reins to someone else, there's no need to fret: your succession will smooth it up for you!