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Established business: Do you have a succession plan?

Starting up a business is a daunting task. We touched on this a bit in one previous post. Getting up and running isn't just a matter of flipping a switch. A lot of preparation is required and once the doors are open, you need to work to keep customers walking through that door.

If you succeed in covering all the start-up bases and business flourishes, the time is bound to come when you'll want to make sure that your "established in" date continues to have significance. The question this raises is whether your comprehensive business planning includes legal provisions for handing things off to someone new.

Timing is everything

The notion of succession planning might seem to relate only to when the head of the company retires. Many experts know that isn't true. Business transitions often come sooner than they used to. Founders move on to new things, but that doesn't mean they want to see what they created go by the wayside. So solid advance planning is considered a best practice.

What that means

Providing enough lead-time is considered crucial for business stability through transition. But how much is enough? The answer depends on your particular situation, but some experts recommend that business leaders should be transparent about when they hope to step down and that succession planning should begin within two years of a set date.

Sustaining client relationships

Succession planning isn't just a matter of changing horses in the middle of a stream. One key success factor founders deliver to business success is the client relationships they had when they started things and developed over time. That's a legacy no business wants to lose so the succession plan should include making sure that the whole team learns the details of existing client relationships. When change does occur, operations will be able to continue more smoothly.

The planner should not stand alone

Competitive maneuvering among possible successors isn't productive. To minimize it, those with experience in this area know it's good to have a neutral facilitator who can help with the plan and aid each potential successor stay up to speed through the changes.

Having a big-picture view of things is key.

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