Succession planning: it's never too early to make a start
It's a question every business owner will face – what's the right time to start planning for their own future and the future of their business? Succession planning is crucial, whether the business is to be sold or passed on to family members or staff.
So, says David Henderson, succession planning expert with business consultancy ROCG, start the process well ahead of time. Put in place systems, procedures and people so that the business is no longer dependent on your involvement and is in good shape to be sold at any time.
Don't let emotion colour your judgment
Try to treat the succession planning process as a planning opportunity – it will help you to be more objective. Think about why someone would want to buy your business. What makes it stand out from all the others on the market? Build on its strengths and try to counter its weaknesses. Bring in new people who are smarter than you.
And, says David Henderson, begin your personal transition gradually, by reducing your working hours and exploring new activities. New owners may not want you involved beyond a brief handover – a long stay after you’ve sold can create confusion for customers, suppliers and staff.
Once you've settled on an exit strategy, stick to it
No two businesses are identical, so you need to consider your special circumstances in your planning. David Haymes, patriarch of the fourth-generation Haymes Paint business, says outside help can be invaluable in the family business context.
He used facilitators from the start to help family members set up the right forums to keep their various involvements on an even keel and keep discussion constructive.
A problem many business owners face, he says, is that they can't bring themselves to let go. So, make your exit strategy plans, make sure everyone understands them and their own role in the business and then step back from day-to-day involvement. An exit strategy, after all, needs to lead to an exit.
Get Your Free “Business Success” Audio Series
Powerful Interviews from the best in business. You’ll learn:
- How to increase profits
- Marketing, sales & cashflow strategies
- Business planning & much more…