If you've built a successful company from the ground up, then there's a strong likelihood that you're looking to do what's necessary for it to remain viable once you've either retired or passed on. Planning for the future of your business is a process known as succession planning.
Perhaps one of the most important steps in the business succession process is identifying your successor. Depending on the size and nature of your business, some industry experts note that you should begin this process up to 15 years prior to your departure from your role.
While initially it may be only natural to think to look to family members to take the helm of your business, they shouldn't be the only ones you consider. Instead, you may look to hire a third-party consultant to help you be more unbiased in your decision making. He or she could help you identify leadership-oriented employees in your own company that may have the necessary skills to carry your company to the next level.
After identifying a potential successor, you should look to cross-train him or her in many of the core functions of your company. Succession experts note that training your successor to handle your executive functions will not provide all the expertise he or she needs to effectively lead.
Instead, they argue that it's important that you have them work within your company's various departments so that they can make mistakes necessary to learn and grow the organization down the road.
Succession experts also note that it's important that you are clear with your prospective successor about timeframes within which he or she is expected to take the reigns of the company. Until that time, it's recommend that you give your successor leeway in making executive level decisions. It's also during this timeframe that you should begin finalizing your retirement plans.
If you embark upon this transition slowly while you're of able mind and body, then it will ensure continued success of your company. A St. George, Utah, estate planning attorney can provide additional guidance about business succession entails and alternatives.
Source: FindLaw, "Succession Planning for Small Businesses," accessed Nov. 10, 2017