Please forgive us for being academic, but in order to fully understand business succession, we are going to define a few terms.
First, an often confused first cousin, business continuity or exit planning:
As the term describes, business continuity is the continued existence of a business, as in the business continues. An exit planning is specific to an owner exiting the business. Business continuity and exit planning addresses the mechanics of the transactional transfer of a business. Business continuity/exit planning can be achieved if the owner exits the business and transfers it to Junior/Sis or sells it to John Doe down the road without any consideration as to whether Junior/Sis or John Doe has any earthly idea as to how to own or operate the business or is a compatible leader in respect to the business culture.
Business continuity planning can involve any number of independent projects including but not limited to:
- Selection of Directors
- Strategic planning
- Sale of stock
- Gifting of stock
- Development and adoption of stockholder’s agreements
- Leadership recruiting
- Management recruiting
- Employment contracts
- Estate planning
- Life insurance acquisition
- Exit Strategy
Succession, as the term proclaims, is the continuity of success. Therefore, in terms of business, succession describes the continuation of business success through the next generation of owners and managers. Planning for the continuation of success is the primary focus of succession planning.
Business succession planning is a process (not a project) that addresses the identification and confirmation of successor owners and management and the effective transition of a culture. In order to achieve your goals it is important to understand and address the interdependent issues, which is the opposite of independent projects, of the Succession Matrix® which include:
Understanding the makeup of the Succession Matrix empowers a planning team to proactively avoid problems and capitalize on opportunities that impact the achievement of the long-term strategy.
What are the issues impacting the value of your business?
Contact us to schedule a Phase I diagnostic assessment of your business to find out.
