Overcoming inertia and making the overall process manageable are the two most difficult aspects to tackle when getting started with family business succession planning. This can be a very overwhelming task simply because it is not just a matter of “let’s just do it.” Successful succession planning requires that you put thought into what happens once the business is no longer in your hands. What will you do now? Are you required to step in if the business falters? Essentially, there are a lot of “what ifs” that need to be taken into account prior to the succession of your business. Putting a detailed process together will however take some off the stress off your shoulders once the succession occurs.
Process Oriented Approach
In order to ensure a smooth and successful transition and succession, there are a few recommended steps to take. Through these steps, you should be able to provide yourself and your successor with a plan of action that will make it clear what is expected of you before, during, and after succession.
- Engage the appropriate professional advisors - Chances are you are not an expert in every area of professional services. To make your job easier, seek out the guidance of a variety of professionals. Some to consider include accountants, attorneys, family advisors, valuation professional, the list goes on.
- Understand potential difficulties you’ll be facing - Before the succession, it is important to take into account what could go wrong or what could be a potential roadblock to a positive succession and then prepare to the best of your ability for those situations.
- Understand key stakeholders’ issues - The succession also has an impact on a variety of stakeholders to your company. It is important to recognize how the stakeholders will be affected in order to have a smooth transition.
- Identify overreaching needs of the business - Strategic business plans can identify these needs as well as how to handle them down the line.
- Thoroughly explore options - This is the stage of the process where your advisors should be showing their worth. There are many different routes you can take with your succession and it is important to pick the best fit for not only yourself, but for all of the players affected.
- Develop a plan - Now that you have decided on the best option for your business, it is time to develop the overall plan. Take into account everything you have learned thus far and create a specific plan for succession. Once finished, make sure to communicate this plan to all parties involved so no one is left in the dark.
- Implement the plan - Time for implementation! Once the succession begins, make sure to monitor it for any of the potential roadblocks you have already uncovered. Also be sure to enjoy the results of your plan, you’ve earned it!
Ultimately, succession planning may seem like a daunting task. Once the initial inertia is conquered and the process is made manageable by a detailed plan, it will be a much simpler and smoother transition that all parties will benefit from.
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