What Business Owners Really Need To Know About Succession Planning

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People become the owner of a business for a variety of reasons. Though some inherit the business from their parents, or grandparents, many go into business for a simple reason: They want to be independent.

The belief that they can do things better than everyone else, the allure of freedom, and the determination to build their own wealth is the driving force behind every business owner I’ve ever met.

The normal evolution of a business begins when you’ve started or bought it. You build and design it, you create something special, and then at some point you usually begin planning for an exit strategy, or succession plan.

Whether that succession plan means a big pay-day, sale, or a transition to someone else, there comes a time when an owner must ask themselves what kind of legacy they wish to leave behind with their business?

A succession plan should be treated like a business plan, and that means having a clear vision of how you want things to look in five years. You have to determine where you want to be, how you want to be involved, and what you really want to get out of it as the architect of your business, and your exit strategy.

Is your design one in which you sell to a third party at a set price, do you see your business living on in perpetuity through one of your children, or do you want to sell and maintain a certain level of involvement?

Let’s say in five years you want to sell the business. Start the process by identifying potential buyers and determine how they make acquisitions. Look at how they’ve valued companies, and how they’ve integrated, merged, or purchased those organizations.

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People become the owner of a business for a variety of reasons. Though some inherit the business from their parents, or grandparents, many go into business for a simple reason: They want to be independent.

The belief that they can do things better than everyone else, the allure of freedom, and the determination to build their own wealth is the driving force behind every business owner I’ve ever met.

The normal evolution of a business begins when you’ve started or bought it. You build and design it, you create something special, and then at some point you usually begin planning for an exit strategy, or succession plan.

Whether that succession plan means a big pay-day, sale, or a transition to someone else, there comes a time when an owner must ask themselves what kind of legacy they wish to leave behind with their business?

A succession plan should be treated like a business plan, and that means having a clear vision of how you want things to look in five years. You have to determine where you want to be, how you want to be involved, and what you really want to get out of it as the architect of your business, and your exit strategy.

Is your design one in which you sell to a third party at a set price, do you see your business living on in perpetuity through one of your children, or do you want to sell and maintain a certain level of involvement?

Let’s say in five years you want to sell the business. Start the process by identifying potential buyers and determine how they make acquisitions. Look at how they’ve valued companies, and how they’ve integrated, merged, or purchased those organizations.

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