Succession planning is the process of choosing a successor to run your business after you retire. It ensures that the business you worked so hard to grow and develop will remain in good hands after you move on to the next phase in your life.
Because there is so much at stake, you must take succession planning very seriously. Here are a few ways you can improve the outcome.
Consider future business trends
You want your business to continue long after you retire. As a result, you must select a successor with their eye on the future. The person you choose must innovate and update your business to ensure it remains relevant to consumers for many years to come. This entails thinking outside the box and pursuing new trends as they relate to your business and industry.
Challenge prospective candidates
Once you have two or three possible candidates in mind, it is time to test their strengths and capabilities. You can do so by asking them to brainstorm on new products or ways to improve your business. You can also inform them of a challenge you currently face and ask their input on how to overcome it. By challenging potential successors, you’ll get a better idea of how they will react to obstacles.
Share information with your succession team
A smooth transition of power is a must to prevent interruptions to your business. Accordingly, make sure your successor is aware of essential information well before they take the reins. This involves aligning successors with board members at your business, so they can build essential information. This allows them to get acclimated to the role you serve, while also having a clear understanding of their duties and responsibilities.
In general, you should begin succession planning at least two years before you plan to retire. That will give you ample time to make decisions in a reasonable and thoughtful manner.