So here’s a topic that all business owners have thought about but few have taken action on: succession planning. I was reading a study by Wilmington Trust the other day that polled 200 different owners of privately held businesses. Personally, I’ve yet to meet a business owner who doesn’t agree that succession planning is important to their company and stakeholders. Yet in this study, 58% of the businesses polled don’t have one in place!
Successions impact…everything: your family, your legacy, your finances, your employees, your partners, your customers, your stakeholders, and anyone else who touches your company. My guess is that you want all these pieces intact throughout your transition and after you leave. Yet most business owners don’t tackle the issue until a) it’s high time to exit, or b) they’re forced to for a reason out of their control.
Why? Many people start to realize that the emotions involved are heavy and deep. Your business is probably something that you’ve poured your heart and soul into for a long period of time. You may have taken significant financial risks that have impacted your family along the way. The decision making required in succession planning brings up a lot of emotion, and many business owners prefer to kick the can down the road rather than deal with them.
Problem is, there are many situations out of our control that could force a succession at an inconvenient time. Health problems, car accidents, or even changes in the economy or your industry could easily force your hand. Rather than rush into a transition unprepared (and in a potential fire sale), you’ll reach a far more desirable outcome when your succession is planned for. What happens if you get into an accident and come out with diminished mental capacity? What happens if you have a heart attack & die tomorrow? What’s the game plan? Who will step in, and how will your family, employees, customers, and other stakeholders be taken care of? These are the questions a good succession plan answers. They’re also the questions that must be made while you’re in a calm, stable, and clear state of mind.