Small and large businesses alike would do well to use business succession planning to keep their operations strong during management and ownership changes. With that in mind, company leaders should seek pertinent guidance from experienced counsel to identify and address any legal concerns that arise during the process.
Although business succession planning is highly individualized to each company’s needs and circumstances, there is still a general set of principles involved in most contexts. Use the seven-step approach to business succession planning detailed below to apply each of these principles to your business’s unique circumstances.
1. Take Prompt and Proactive Action
Prompt action will involve you taking concrete steps toward getting a business succession plan worked out sooner rather than later. Reading about business succession plans in a blog like this is certainly helpful, but making a move toward a complete and well-thought-out plan is the ultimate goal.
Even if you feel your business is prepared for the future, you may be taken off guard by unexpected occurrences, such as unplanned departures of management or talent, if you don’t already have a clear business succession plan in place.
2. Identify Potential Candidates for Succession
Business succession planning involves knowing who may need replacing. And in many cases, that isn’t so difficult. However, what often is challenging is the matter of identifying candidates for succession.
You need to determine who can step in for key personnel to mitigate the impact and consequences of their departure. Doing so requires reviewing personnel and performance records for individuals with the proper skills, training, and talent to fit particular roles in need of filling.
3. Meet With Business Succession Candidates
Having identified potential successors to management and other supervisory roles, you’ll now want to meet with each of them. Waiting until they are needed to fill a role is approaching the matter far too late. Candidates should be informed that they are being groomed so they can grow into the roles that are awaiting them.
4. Foster Professional Development and Training
Before succession occurs, candidates should receive professional development and training to prepare them for their new roles. Shadowing and mentorships, for example, are great ways for candidates to learn the ropes.
5. Evaluate and Assess
As your business succession plan is executed, you will want to take the time to assess and evaluate its strengths and weaknesses. Determine what works well and what needs revamping. Evaluate your successor candidates on a regular basis for strengths and weaknesses and make appropriate changes if any are required.
6. Try a Trial Run
There’s no way to guarantee the effectiveness of your business succession planning until it is put into action. You can, however, get a good idea of things by engaging in one (or multiple) trial runs. Have your candidates temporarily assume the roles they are meant to have at some point. Afterward, you can debrief with the candidate and make adjustments where necessary.
7. Implement and Evaluate
Lastly, it’s important to know that the day will come when some or all of your succession plans must be implemented. If you have followed the above-listed steps and have retained legal counsel, you should enjoy a reasonably predictable business succession experience. Periodic evaluation of the changes is crucial for ongoing success.
Pertinent Guidance for Your Business
Business succession planning is crucial for your company’s future. It is also just as important to ensure you are provided with proper guidance throughout the entire process. Borakove Osman LLC has guided and advised numerous Madison businesses and is ready to meet you! Contact our office today to schedule a consultation and learn more about how we can help.