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How to create a strong business succession plan

Running a business can be stressful, but it is also incredibly rewarding. You get to make the big decisions that guide your company to success. You decide how your brand presents itself to the outside world. You also make decisions about who is a part of your company.

However, it is one thing to hire a new sales manager, and quite another to pick the person who will take over the company after you leave. Maybe you want to retire soon or perhaps turning the business over seems a long way off. Whatever the case, picking a successor is crucial to the continued success of your business. Here are some ideas to get you started with drafting a business succession plan.

Pick a target date

You may be unsure about when you will be ready to turn the reins over to someone else. However, setting a date is only fair for your successor. He or she will not be waiting around, wondering when you are going to decide the time is right. Entrepreneur states it also allows you to create goals and break your work into more manageable chunks, so you can more effectively execute the plan.

Define future goals

When you are creating a succession plan, you need to decide what you want for your company in the future. Do you want to grow sales a certain percentage? Should the company expand overseas? Or maybe you want the business to focus on developing new product lines. Defining these goals will help you focus on the kind of skill sets you should be looking for in a successor.

Create a list of skills required for your role

You want to pick successor with the correct skills to replace you. Make a list of the strengths you possess, as well as any skills you think your successor will need to guide the company toward future goals. There may also be skills that you lack that you would like the future head of business to possess. Include those skills on your list as well.

Get stakeholders involved

If you have a board of directors, they will need to be involved in this process. Even if you have no board, you may want to involve upper management or human resources. These stakeholders may have helpful insight about potential candidates and could encourage you to think about the situation in a different way.

Name a successor and provide training

After you have assessed your candidate pool, you will want to name your successor. Do not expect them to be ready to go the minute you select him or her. Hopefully, you have already created a timeline for when the successor will take over for you. While you are working toward that timeline, you will want to train your successor. You can have him or her shadow you while you work. You may also want to hand over some of your responsibilities, so he or she can start out small. Remember, this person is learning, so any mistakes he or she makes are opportunities for growth. Let him or her know you are here to help.

Draft a succession plan with some help

Since you have defined your goals and named a successor, it is now time to draft an actual succession plan. You will want to involve your successor in this process. You may also need to seek some expert help, like contacting an accountant to help you evaluate the company’s finances. An experienced attorney can also advise you on how to draft a succession plan that is legally sound.

Drafting a succession plan can seem daunting. However, planning ahead will help ensure your business’s continued success.

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