As a business owner or entrepreneur, the thought of retirement, passing on your family business, or deciding who you will sell your business to has probably crossed your mind, even if it is thinking far ahead. It is never too early for entrepreneurs to start a succession plan: I always encourage clients to strategize for the future and the unexpected to avoid the stress and costs of delayed planning or the risk of losing your business if there is no plan in place at all.
What is Succession Planning?
Succession planning provides instruction for a transfer of ownership in cases of retirement, death, or business incapacitation. Succession planning ensures your business continues to operate under capable leadership on your terms.
What Should a Succession Plan Include?
Your success plan should include the following elements:
Your Chosen Successor:
You should identify and define your chosen successor. Ideally, you will name additional potential successors in order of preference if your chosen successor cannot fulfill the role.
Include a strategic plan for operations management, optimal productivity, process simplification, performance plans, and more to maintain functionality during the succession process.
You must identify how the succession will be funded and identify and allocate assets, cash flow, and more.
Why is it necessary for business owners to develop a succession plan?
Succession plans are essential to secure your family legacy if you are running a family business. Additionally, succession plans secure the future of your business.
Succession plans play a critical role in securing your business for the unexpected. For example, if your business exit is involuntary, it will continue to operate efficiently. It is excellent to craft a succession strategy ahead of time to save money, time, and effort in the long run.
How do I create a succession plan?
- We identify the optimal succession strategy aligning with your personal preference, stipulations, and professional goals with a business assessment and your vision of your future.
- Financial preparedness: succession planning requires extensive funding. I create financial projections for my clients to determine the revenue needed to fund their next season of life. I will advise you on pursuing the most necessary professional resources for cost-effective efficiency.
- Value building: we identify your current business market value using professional assessments, then strategize building its value by increasing sales revenue, capitalizing on key results areas, minimizing or eliminating constraints, and more.
- Operations and process management: we strategize optimizing daily operations and process management for expense reduction and ease of ownership transition.
- Employee/successor development: your co-owner, family successor, or employees undergo training to assume leadership by managing responsibilities with minimal supervision to ease the transition process.
Inquiring entrepreneurs and business owners who reside in the greater Post Falls area, including Coeur d’Alene, Hayden ID, or Spokane and Spokane Valley, Washington – or are international clients – can contact me today to inquire about succession planning.