Creating a business succession plan is critical for every California business owner. However, successfully transferring a business requires more than a plan – it also requires action.
Business owners must prepare their successor, so the transition is smooth for both them and the business. Here are three tips business owners should consider when preparing their successor.
1. Start the transition early
Rushing through preparation or training will only be stressful, and potentially risky for the business. Forbes recommends beginning the process of business succession planning early, but this also applies to the transition itself.
You should make sure you give yourself plenty of time to prepare your chosen successor properly.
2. Create a customized training
As a business owner, you know the insights and nuances of your company. You will have to transfer that knowledge to your successor.
That is why business owners should design a specific plan to train their successor which helps them:
- Develop and enhance the skills they will need to run the business successfully;
- Form relationships with stakeholders, business partners and even employees;
- Understand financial information, passwords or even trademark registration information.
You may also want to consider having your successor shadow you for some time. This is possibly the most effective way of training a successor, so they will learn the nuances of the business as well.
3. Mentor them, but let them learn
When you invest so much time, effort and passion into building your business, it can be difficult to step back. However, you do not have to withdraw from the business completely.
Many business owners find it is beneficial to gradually leave the business. They slowly step back from their duties, while letting their successor take on more responsibilities over time. This would allow you to be available as a mentor but also give your successor time and space to adjust to their new role.
How you prepare your successor will depend on your business’ needs. However, every business owner must train their successor and equip them with the skills they will need to help the business thrive.
