Plan your business succession with 5 simple tips
As the owner of a small/medium enterprise, you might have different aspirations for your business. You may have imagined it growing even after you decide to call it a day. You can hand it over to someone who promises to bring in a fresh set of ideas or pass it down to a successor who would fulfill what you had envisaged.
Without a long-term approach and the proverbial ‘vision’, you might as well sell off the business. However, if you would want your successor to carry the baton ahead, then you might want to plan for business succession well in advance. And this will warrant you to firstly handpick and then mentor new leaders, thereby prepping them to take up the responsibility of the business you had nurtured over all these years.
These 5 simple tips can help you plan a smooth business succession:
- Plan beforehand
You should start planning years in advance, to be well-prepared in time for any unexpected event that could put the future of your business at stake. Planning early can also help you maximize the value of your business.
- Have a written plan
Only having envisaged a future for your business set-up isn’t the end of the road. It is imperative for you to have a documented plan of action at your disposal. This will give you the much-needed look-in into all the things you’d have to do once you decide to sell or transfer the ownership of your business.
- Be realistic
Make a plan that is realistic and achievable. You need to be pragmatic while handing your business to a successor. No matter how smart the next-in-line is, it would be asking for too much on your part to expect them to deliver right from the beginning.
For the new leader to assume full responsibility and start with efficient operations, it would take some time and effort at their end and patience at yours.
- Identify the right replacement
You could have a successor from within the family, an employee from the organization or somebody outside both the organizational and family precincts. In any case, you will need to be rational while choosing the inheritor and justify your choice as well – to your dependents, if need be.
While the ideal choice would be an internal employee who knows the business inside out, it is you and the direct stakeholders of the business who need to be explained the rationale.
- Invest in training and development
While you move out and make room for the next one to come in, the onus is on you to impart the right training and take him/her through the whole succession stage as smoothly as you can. Investing your resources in training the descendant will only aid a comfortable transition such that he/she is prepared to take up the key positions, right in time.
A business cannot belong to you forever. There will come a point in time when you will have to pass it on to somebody who is the worthy candidate. A Business expansion loan from Reliance Money can help you do just that by making sure you have a well-oiled actionable plan in place, well in advance.