Business owners face many challenges in their day-to-day business lives, but nothing is more daunting than how they will build the right succession plan for their business and for themselves personally when it comes time to retire. Statistics have shown that 75% of the business owners who recently sold their businesses failed to accomplish their personal or financial objectives. No doubt, the importance of planning for the business owner, their business and the people around them is critical for a successful outcome.
Recently, I attended a panel discussion on the best practices that can lead to a successful transition of your business. I have listed below a few key takeaways from the session:
- Planning is important. You need to formulate a plan about your business transition sooner rather than later.
- Engage a team of trusted advisors. This group should include a lawyer, accountant, business broker, banker and human capital consultant.
- Hire a successor. Whether a family member or outsider, you need to hire the right person or persons who can take your business to the next level.
- Pass along your knowledge. Your successes and failures will add great insight and help your successor grow more quickly.
- Enjoy your retirement. Transition planning is never an easy process, but if done correctly, it will provide a long-lasting benefit for all parties.
I hope the above points will provide you with some useful information as you think about planning for your succession. Transition planning is never an easy process, but if done correctly will provide a long-lasting benefit for all parties.
Over the years, Human Capital Consulting Partners has assisted business owners with their transition process. Our role for business owners has been to act as the trusted advisor on the people issues impacting the transition, whether the owner was selling their business or turning over the reins to a family member or external hire. We have helped our clients deal with the following issues:
- Design of the appropriate organization structure
- Development of job profiles outlining duties/responsibilities, competencies and needed experiences
- Recruitment and assessment of C-level executives
- Design of an executive compensation plan that includes base salary, annual and long term incentive bonuses
- Creation of a stock ownership program where key staff members share in the ownership of the company
- Coaching, on a one-to-one basis, of executives who assume new management roles on how to handle both the business and leadership components of their new position
- Assessment of the gaps that exist between the business strategy, vision/mission and people skills/competencies
- Pre and post due diligence on all the people issues required during a sale of a company
For more information on how Human Capital Consulting Partners can assist you in developing your company’s recruiting process, contact us.