What’s Your Succession Plan?

Monday, January 24 2022

By Ken Ingram – Did you know that the first known use of the word plan dates back to the late seventh century?

A plan can be described as any list of steps with timing and resources that are used to achieve a specific objective. If our plan is to pass on the business to the next generation and/or key employees, a plan becomes essential.

At one time or another most of us have followed a recipe from a cookbook. Why do we do this? It is to learn, by following a process set up by someone who knows how to create a delicious dish, and then we can adapt it to our tastes. We make it our own by repeating the process. Succession planning is a similar process — your recipe for success. A recipe that, even if it does not come out as first planned, can be tweaked until the desired result is obtained. Then, the recipe can be followed by others who will learn as they work with it.

Business owners who have spent 20 to 30 years building a solid, sustainable, and profitable business often fail to develop succession plans. What is it about planning that most people seem not to like? Why do they prefer not to think about it? Benjamin Franklin famously said, “If you fail to plan, you are planning to fail.” If this is true and planning has a benefit, then why do we fail to do enough planning?

It’s likely the people being tapped to lead the business into the future have never been through such a process before and are unlikely qualified to develop such a plan on their own. If we involve them in the process, however, they are more likely to follow it. Then, as the business owner, we have the responsibility to invest in them – time, money, and energy – to ensure when the time is right, they are ready to lead.

It takes years to transition a business, so start your exit plan early enough to invest the time required in those people chosen to carry on. Understand they learn at different speeds and in different ways. Unfortunately, mistakes are one of the best teachers, so its best to create an environment where the mistakes they make can be monitored and minimized. Once you walk out the door for the last time, it’s too late.