For every business owner, the day comes: the business owner wants to retire or must retire due to health reasons. How do you find a successor? There is an art and science to finding a successor, and choosing one well requires much work. Here are some top tips for choosing and grooming a successor.
Build a Succession Plan
No matter how good a business owner you are, one day you will retire or pass away. You owe it to yourself (and your family, if any), employees, and suppliers to ensure that the business continues after you do not own it anymore.
You need to start your succession plan long before you want to retire. First, make sure that you have a viable business. Only when you are sure that your business has a reasonable chance of long-term survival, start thinking about whom you want to entrust it to when the time comes.
Have a Firm Succession Date in Place
If no successor is in place, you can be sure that your business will collapse. You need to have a firm date in mind when you want to retire and whom you want to pass the business over to. This helps all parties stay focused on what needs to be achieved before this goal is reached.
Define the Succession Criteria
Ensure that you know what characteristics (and personal qualities) the potential successor(s) need to have for you to consider them worthy of taking over your business. The best way to do this is by putting together a criteria list and ranking the top four or five traits according to how important they are.
Use a Selection Process
Once you have your list of potential successors, it doesn’t hurt to run them through a selection process before making your final decision. This will help you assess the potential successor’s personal qualities and assess how well they meet your criteria.
With the right strategy, planning, and preparation, you can be confident of finding a successor who will not only continue to make your business grow but also maintain it as the best in its industry.