5 steps for a forward-looking business succession plan
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5 steps for a forward-looking business succession plan

When it’s time for you to retire or sell your business, do you want the person taking your place to do things exactly how you’ve done them through the years? If so, that could be a mistake.

Preserving what you’ve built means it’s essential to understand how many of your company’s strengths could actually keep it from being successful in the future.

Future-proofing your company

When retirement comes into the picture, you should start thinking about a successor at least two years before deciding to step down. Instead of focusing on past successes, think about the type of leader who will be needed to help your company meet the challenges of the future, including:

  • Keys to success: What trends exist in technology and social norms, and how will the competitive terrain likely change? Do you already have someone in mind who can reinvent the company to meet those challenges?
  • List the candidates: You will need someone with a proven track record to succeed you. For internal candidates, look for two individuals who have distinguished themselves in creating new revenue streams, or have success running operations. If no such candidates exist, look outside your company.
  • Test your candidates: Whether your top two choices come from within or outside the company, test their abilities by assigning exercises to develop new products that can take advantage of emerging revenue opportunities, or task them with improving the company’s bottom line.
  • Build a deep bench: In addition to finding a successor to take over for you, ask your candidates to find their own successors and document how these decisions are made so that new hires can get up to speed as quickly as possible.
  • Share vital access: Once you find strong candidates for your position, give them access to board-level information and board members, so they get to know the people and the landscape, and can step into your shoes with the least possible disruption to the company.

Protect your legacy and your company’s future success

Creating a thorough succession plan in Kentucky is one of the most crucial decisions that a business owner or CEO will ever make. When it’s time to pass the torch, it’s important to consult with an attorney experienced in both business and commercial law.

Your lawyer can advise you on every step of your company’s unique succession plan, including the timeline for the transition, crafting a succession plan or purchase agreement, valuing your company, tax planning and managing the business through the transition.