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Succession Planning in a Business

Welcome back to my weekly articles on business building. In order to extract value from a business it needs to be sellable. For many business owners, the value of their business will dictate how successful (or not) their retirement will be. One of the key determinants for enhancing value lies in having an exceptional team. Building a good team takes time, energy, and focus. As an owner, preparing a team for growth and for succession, whether it is to a family member, or to employees, requires a plan and a clear path. In this article I discuss what succession planning is and the 6 key things that an owner must do to ensure their company is ready for their eventual transition out. Preparing for a succession enhances value to future buyers as they want a business that is not dependent upon the owner, but rather on the team he has built to drive future growth.

Most owners get one chance to get it right when they decide to sell, yet most owners cannot sell the business they built (only 1 in 10 are successful) because they did not build a sellable asset. If selling your business to fund your future lifestyle is a must, ask yourself whether you are prepared or not, and then identify what you need to do to get to where you need to be.

With up to 76% of Canadian businesses reporting that they hope to exit in the next 10 years, being unprepared might cost you both your legacy and your retirement. With only 1 in 10 having a plan, the odds against are not in an owner’s favor.

Succession Planning Process
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