As a small business owner, you realize that there will come a time when you’re no longer willing or able to run your company. This happens for a number of reasons, including but not limited to retirement, incapacitation and death.
Creating a business succession plan is a must, as it can help prevent time-consuming and costly issues when the time comes.
There is more than one way to develop a succession plan, however, there are five basic steps you’ll want to take:
- Select your successor: This is the first step in the process, as selecting a successor will ease some stress when making other key decisions. Your successor can be anyone you want, ranging from a family member to another employee. Be sure to discuss your succession plan with your successor, as you want them to understand your intentions.
- Create a training program: Even if your successor understands your duties and responsibilities, it doesn’t mean they can step in and run the company the same way you did. Creating a formal training program will go a long way in making for a smoother transition.
- Have a timeline: Some company owners put a date on when they will step away from the business. Others, however, don’t have an exact idea of when this will happen. Even if you don’t have a specific timeline, you can plan for a variety of circumstances.
- Think about your personal future: Your retirement plan and succession plan should work together in perfect harmony. You don’t want to give up control of your company without an idea of what comes next.
- Execute your plan: If you’re taking part in the transition, follow your plan down to every last detail. If your succession plan will come into play after your death, be sure that the appropriate individuals understand how to carry it out.
It’s not always easy to think about the day when you’ll no longer be in charge of your business, but it’s the responsible thing to do.
When you create a business succession plan, you’ll feel much better about the well-being of your company, your loved ones, your employees and your own self. Don’t hesitate to get started, as you never know when you’ll need to activate your plan.