If you are a business owner, chances are you have contemplated what will happen to your business once you have left the company. Business succession planning is when the owner of a business plans for a future date when they will no longer be a part of the day-to-day operations of the business. Succession planning isn’t just for death or disability of the owner; a good succession strategy also plans for expected life events like retirement. By having a solid succession plan in place before you leave, the transition will be easier for you, your successor, and your business’s employees.
1) Choose a successor
Arguably the most important step in succession planning is choosing your successor. Some business owners prefer to choose a successor from their family, while others pick a dedicated long-time employee. Regardless of who you choose, having a successor named before it becomes relevant helps to smooth the transition once you leave the business.
2) Develop a plan for training your successor
Training your successor is also important. A good training plan will cover all aspects of your business so that your successor is equipped with the knowledge and know-how needed to take your place. Make sure that your successor has the opportunity to meet with key employees and management in each business area, so they can also familiarize themselves with both the workers and the daily operations.
3) Establish a timetable
Establishing a timetable both for when you will leave the company and when your successor will officially take over your responsibilities, helps to keep everyone on schedule and ensure that the transition moves forward at a timely rate. Your timetable should be realistic and broken down into smaller achievable goals throughout. For example, you may have a goal of having your successor manage all the research and development aspects of your business first, then a month later, set another goal for when they can assume management of employees.
4) Define your new role
Some business owners leave the business completely after retirement, while others remain as part of the company in some capacity. If you are planning on staying on as a consultant, board member, or fulfilling another duty, your new role in the company should be fully developed for your sake as well as the sake of your successor.
5) Start your successor in their new role
It is also a good idea to have your successor in place before you leave. This helps your successor transition by having you guiding them as they learn the ins and outs of the business, and is also useful for employees and management, so they have the opportunity to get used to their new boss gradually.
Helping Maryland business owners for 40 years
At the Law Office of Jack R. Sturgill, we work tirelessly to help our clients be successful in business. If you are a Maryland resident interested in how our legal services can help take your business to the next level, please visit us online at www.jackslaw.com or contact our office by telephone at (410) 296-6485.