Business Succession Planning Strategies
In conducting business succession planning strategies and financial planning work for business owners, I’ve discovered that there are two types of leaders: the first type is comprised of what I call the “DIY crowd.” These kinds of owners and entrepreneurs delay planning for the inevitable, in most cases, unintentionally. They firmly believe they will somehow, some day, shoehorn into their already-crazy schedules the major time commitment required to personally design, coordinate, and implement a combined business and personal retirement transition plan. They want to do it all themselves.
Their determination is understandable. Many owners have built their companies almost singlehandedly, so they reason, who better to manage its transition? Despite these great intentions, most realize too late that the day-to-day operation of their business always takes precedence, since failure to do so could threaten life as they now know it and the legacy they’re hoping to protect and pass along. The unfortunate result: many DIYers end up working until the day they die. When they leave the planet, they also leave their companies and private interests in complete disarray. In fact, just 12 percent of businesses survive to the third generation, and 3 percent to the fourth, according to the Conway Center for Family Business.
The second type of leader is the “effective delegator.” An effective delegator recognizes that having a great life after leaving their company’s helm begins the same way as achieving any other goal: with a dogged determination to succeed. They quickly ascertain that attempting to plan the details of their transition to retirement would be a full-time job, one for which they lack both time and expertise. Knowing the fires sparked within their companies on a daily basis aren’t magically going away anytime soon, effective delegators surround themselves with people skilled in the art of extinguishing them. This frees them up to focus on the big stuff, and, most notably, keeping their companies innovative, vibrant, and vital to customers. This is why, when it’s time to think about what’s next for both their businesses and themselves, effective delegators carefully vet and hire skilled professional help. For example, they hire an advisor they hold accountable to creating and implementing business succession planning strategies based on their objectives and designed to help meet them
Think about your own business succession planning strategies. Which of these leaders best represents you? If you are looking to build a business succession team as successful and agile as your corporate management team – the time is now to begin assembling your own “dream team” to realize your business’s true potential.