No matter how it happens, it is inevitable that you will someday let go of your business. Perhaps your interests will change, or maybe you will be unable to continue leading the company for whatever reason.
In that situation, it is important to have a successor at hand who is ready to take up the reigns. But what exactly makes a successor good?
Internal vs. external succession
Forbes discusses crucial components of having a succession plan. Generally speaking, it is possible to have an external or an internal successor. An internal successor will be someone who has worked within the company, usually for quite some time. External successors often happen when a family member not involved in the business inherits it.
Both options have their potential benefits and downsides, but internal successors generally make for a better pick because they already have investment in the company and allegiance to and understanding of the way things ran under you.
Ensuring a good pick
To make the best successor pick, it is important to do several things. This includes platforming your leaders, working on succession every day, investing in the company culture, investing in your team, and setting your successor up for success.
Of course, a degree of their success will depend solely on them. But you can give them the tools they need to succeed, such as showing them the ropes, ensuring they understand the vision behind the company, and making sure your visions for the company’s growth and direction line up.
In doing so, you can select a successor that you will be ready to leave the business to.