Succession planning is one of those necessary evils for business owners and key management that often gets moved to the bottom of the pile. This happens for a number of reasons, including the sheer volume of things on the to-do list as well as the emotional toll succession planning can take. It’s usually not easy for people to think about retiring and giving up what has become so much a part of themselves. However, a successful transition takes years to prepare and facilitate, so it’s vital to start early, especially when you care as much about the outcome as most business executives do. Planning ahead will help you and your business reach the goals that you’ve set.
Ohio Succession Planning
Sikich has worked with many business owners and firms on their succession planning efforts. Our experience has helped us compile the list below of a few things that can help exiting owners prepare for exit, including:
- First, set the stage early. If you’re an entrepreneur, you must know that you’ll have to sell or pass the reins to someone at some point in time. The earlier you have the foresight to make as much of the business independent of you, the better. For instance, begin documenting processes and systems so others can easily follow them if – and when – needed, train a back-up person on each task that you perform, bring others into client and sales meetings to start grooming them.
- Set a sufficient timeline. It takes several years of careful planning and implementation of succession planning steps to really get the pieces to fit. Knowing when you want to retire is key. Even if you want that date to be a little flexible, set a target date – hopefully three to five years out – and then build a timeline backwards from there that includes key milestones and associated goals. Breaking down a huge task like succession into “bite-sized” pieces will also serve the purpose of making the plan more manageable and actionable.
- Identify your successor – or successors – early and begin training immediately. This may go without saying, but as a business owner or executive, you probably have a large job with a hand in many parts of the business. It may take more than one person to actually fill those shoes depending on the skill level needed for the job and who is available. If possible, seek out candidates from within the organization and begin grooming them as soon as is appropriate. It’s possible that one superstar exists who can take on the majority of tasks, but if not, start deconstructing your job description to hand off the responsibilities to others.
- Empower your successor. When accustomed to doing so much yourself – and let’s face it, you may be quite particular about how things get done – it’s not always easy to allow others the flexibility to do it their way. However, once you’ve begun training your successor, allow them to actually take over some of your responsibilities. Let them be a part of big decisions, including purchases, new hires, and product changes. Their involvement in these aspects of the company will make the transition easier.
- Communicate early and often to stakeholders. This includes your team. Gaining as much support as possible in the transition is important so it requires open communication with employees and others. It’s important to be open about the transition and reduce anxiety and fear about the upcoming change. Communicating with key clients and bringing the successor into those relationships will also ease the transition.
Planning to exit your business can be challenging, but having a solid guide and timeline can make the process much smoother. For more information or to discuss succession planning for your organization, reach out to Ray Lampner, CPA. In a brief discussion he can address your concerns and provide direction on best next steps.