If you own a company, then you probably intend to have it continue supporting you and your family even after you retire. Or, you may hope to leave a legacy behind for your family. There’s no guarantee that either one of these options will be possible if you don’t take proactive measures now to craft a business succession plan.
One of the first steps in the business succession process that you can start doing now is identifying who might be an ideal candidate to be your successor. There are a few options you can employ in selecting the right person for this role.
What should I do to identify a successor to run my business?
In the context of business succession planning, a successor is an individual you may identify as your best candidate for carrying your company forward, leading it in its new chapter or taking it in another direction.
While you may initially think that a relative or friend would be a natural replacement for you in your role, is it really their thing? Are you confident that they’d be as motivated to get up every day and do what you do or have the vision to grow your company as you have? You may want to expand your candidate search if you’re uncertain.
You may want to more critically assess whether any of your current employees show promise if friends and family don’t. You’ll want to ask any short-listed candidates about their interest in career growth. Should such a search not prove fruitful, then you’ll need to expand your search to outside candidates. Identifying and interviewing them can take time, and you need to start providing promising candidates with cross-training opportunities and leadership training if you expect them to become the ideal successor.
Why it matters that you have a business succession plan in place
Prospective and current employees pay attention to who runs a business. They may feel uneasy about working for one that seems like it could go out of operation if its owner retired or passed away. Potential investors may feel the same way.
A succession plan can give others confidence in your company, knowing that there’s a plan for the future. Confidence breeds trust, something that paves a company’s path to higher-level success.