7 do’s and don’ts of succession planning

By Bridget McCrea

Passing the torch to a new leader is never easy, particularly for long-time owners, principals, presidents, vice presidents, and managers. Here are seven do’s and don’ts to consider when developing and implementing succession plans:

  1. Do gain a clear vision of your goals and constraints for succession planning before developing a plan.
  2. Do create scenario alternatives for ownership succession transitions.
  3. Do rank those scenario alternatives based on your preferences and constraints.
  4. Do build a business case on your preferred alternative and make sure that it is realistic.
  5. Do augment your planning process with an outside advisory firm with strong expertise in this area to guide you through the process.
  6. Don’t wait. Start thinking about succession planning at least 5-10 years ahead. Time is your enemy. (Like savings, if you start putting away $1 a week as a child and do it consistently, you’ll be far better off than the person who tries to save it all 5 years before retirement.)
  7. Don’t do it alone. While business owners are excellent at starting, building, and managing firms, exiting requires a completely different skill set. Trying to do successful succession planning without proper guidance will almost always fail.
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