Passing the Torch: 5 Tips for Business Perpetuation Planning
Succession planning is not an exact science since there isn't one approach that's right for every situation. However, business owners should focus on the following five steps.
- Choose Your Successor Examine all employees whohave the skills and ability to lead the company. If you have difficulty narrowing the field, seek the advice of your board of directors or form a search committee.Experts generally estimate succession planning should begin 15 years before you intend to retire. This way, you have time to oversee your successor as he or she learns the business and hones their skills.
- Developa Formal Training Plan for Your Successor Identify critical functions of the company. Then, have your successor work in each of these areas. Allow him or her to learn, grow and make mistakes before assuming the helm. By creating a culture that encourages the person to take charge within broad guidelines, you establish space for your successor's style to fit with your broader business goals.
- Establisha Timetable Set up a timetable for shifting control of the company and pinpoint who's in charge of what and when. Your successor can't succeed if you overrule decisions routinely. Also, a timetable helps motivate your successor to move through his or her training program quickly and successfully, with a clear understanding of the coming roles and responsibilities.
- Prepare Yourself for Retirement It's important to outline a plan for your transition. As your successor takes on more responsibilities, spend time planning how youll continue to be energized and involved in other activities away from the business.
- Install Your Successor Ultimately, your successor's success or failure is up to him or her. You can lay the groundwork, provide the training and establish a culture for your company. From there, senior management and the board of directors are the support system and checks and balances for the company.
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