You may not intend to retire for many more years, but life can be unpredictable for Illinois business owners. According to FindLaw, a business succession plan can mean the difference between continued success or tragic failure for your company in the event of your unexpected death or incapacitation. If your business is family operated, the lack of a succession plan may spark a feud, and both your business and your family may suffer as a result.
When planning for the future, it can be difficult to know where to start. Here are some ideas to help you formulate a strategy for developing and implementing a business succession plan.
Plan to keep busy in retirement
It will be frustrating for your successor if you keep looking over his or her shoulder as he or she starts out as the head of the company. If you keep hanging around, the temptation for your employees will be to go over your successor’s head and come to you for decisions out of habit. Make a plan to determine how you will occupy your time after retirement, and enjoy your well-earned time away.
Choose your successor early in the process
At least 15 years prior to your planned retirement, start thinking about who you would like to name as your successor. Given the emotional aspects of choosing among family members, you may benefit from the impartial opinion of a third-party consultant when thinking about a successor for your family business. Otherwise, one of your existing employees may have the right leadership skills, so start by looking within your organization.
Set a timetable following a formal training program
You do not want to throw your successor into a situation for which he or she will be ill prepared, so start with a formal training program in which your successor will work in one key area at a time, allowing him or her to make some mistakes along the way. Once the training program is complete and you are ready to pass the torch, ease your successor into the position by setting a timetable according to which he or she will begin assuming leadership responsibilities.
Serve as a guide and a mentor for your successor, but remember that he or she will probably do things differently from the way you would do them. Different is not necessarily wrong, so do not undermine your successor’s authority with the employees by overruling his or her decisions.
The information in this article is not intended as legal advice but provided for educational purposes only.