This week’s stage is focused on Building a Succession Plan for your business. That’s right – we’re going to discuss how you should do the preparation to make an orderly transition to a new owner of your business. So why is this such an important topic? Because every business owner will eventually go through a transition of ownership.
Whether it is a transition to a family member, a sale to an existing employee group, a sale to an external buyer, or one of the three “D’s” – disability, divorce or death, every business will go through a transition from one owner to another.
I suppose the only exception is when the current owner makes the decision (or because of a lack of decision) to shut the business down. And given that you have poured your heart and soul into the business, that is not the desired outcome.
Your Profit Tip of the Day
The most prepared business owners share their dreams, desires, questions and concerns with their trusted advisors so they can be as prepared as possible to achieve the optimal transition for their business.
Here’s how to get started: Take out a notepad and write down the things that are most important to you about how that transition occurs. This can be a list of concerns or a narrative of the situation, emotions, people involved and desired outcomes. No matter, put it in language and a format that works for you.
Answer these kinds of questions:
- Who are the specific people you want involved in the process?
- How will you share the news with your key people?
- What are the specific outcomes that you want to occur?
- What are you doing following the event?
- Where are you going?
- Who are you going with?
- What is the predominant feeling that you and your spouse will have as a result?
Whether you do this in 10 minutes or 10 days, it is important to get your thoughts together before you begin having discussions with others. Not that you should not listen to their wise counsel, but it is beneficial to always do your own thinking first then make adjustments as you see necessary.
Once you have a complete picture of your desired transition, now schedule time to visit with your close circle of advisors. You can either visit with them one by one or you can call them all together and share your thoughts.
My experience is that most business owners do not take advantage of the knowledge,experience and wisdom of their close advisors on matters such as these. Rather than calling a small group together to think through this important transition, many will simply try to execute a transition on their own, or with the help of a previously unknown outside third party broker.
Lean on those you know, trust and respect. They will help you think through many aspects of a succession plan that would otherwise be missed. Take this opportunity to gather additional notes, critical issues to address, potential minefields to avoid and traps to watch for.
All of these ideas and thoughts can go into your succession plan notebook. Building a Succession Plan is as much about putting your desired thoughts on paper as it is about deciding who should replace you as leader of the business.
Take the time this week to build your plan. It will add clarity to the critical issues in your business while at the same time give you peace of mind that you are thinking ahead and making thoughtful decisions.
If you’re looking for more success and freedom from your business, join my FREE, private Facebook Group called The Peloton. It’s where business owners like you are learning, sharing and working together to get better every day! Here’s the link: https://www.facebook.com/groups/jointhepeloton/
Come on – join us! And remember, whatever you do, RIDE HARD!