Depending upon whether you want to sell the business, transition leadership/ownership to a family successor, or outside management – the following steps will set you up for success. The sooner you begin this process, the sooner you protect your life’s work and be able to begin climbing other mountains.
Decide what event(s) will trigger your decision to begin formal succession planning. The triggering event can be any one or more of several conditions: business size and growth; a certain age (pick a specific year); a specific level of wealth accumulation (choose a figure); or the proverbial offer you can’t refuse.
Once a year, ask yourself this question: If I were financially able and free from all restrictions, what would I do that has nothing to do with my business? Keep a journal of the answers. They are the key to reinventing yourself if and when you choose to leave the business.
Drive your mission, vision, and values as deeply into the organization by carefully selecting people who share those attributes. Develop a leadership system that highlights psychological and emotional diversity and broad business skills.
Determine the level of interest family members have in the business. If there appears to be none, then you have several options based on the size and scope of your business. You can bring in professional management and leave the business within the family, sell it, or take it public.
If family members are competent, capable, and committed, begin a successor development program for those involved. Remember that an immediate family member does not have to be the CEO the day you decide to leave. You can build a succession bridge to span the development gap.
Use strategic planning as a way of establishing a long-term direction for the business. This gives the leadership team or prospective buyers an indication of the possibilities and probabilities of future success and returns on their financial and temporal capital going forward.
Work with financial professionals and wealth coaches to provide outside, detached counsel regarding liquidity and sound investment strategies that achieve financial independence from the business. Those strategies will change from one generation to the next.
Set a strike point for your exit. When it comes, exercise your option to leave and begin doing what you would do if you were financially able and free to choose without restrictions.
Owner Motivation and Perspective
An owner’s perspective and attitude towards the business, employees and the community shapes the culture of the organization, attitudes of employees and customers.