The following is an excerpt from Ice Miller's Business Transition Strategies to Preserve Wealth Guide, which provides insights on a variety of topics to help ensure a smooth business transition.
Succession planning is not an event; it's a process. A succession plan will change, as will a business plan. Even after a business owner has put pen to paper, it is critical that the plans continue to evolve. Succession plans should be reviewed and updated from time to time (probably annually) to reflect changes in the marketplace, competitive conditions in the industry, and the capabilities and development of the current leadership team. The process of annually renewed focus forces ownership and leadership to continue to confront difficult facts like choosing among potential successors, dealing with bad hires or lack of leadership development, continuing tax and estate plan issues, the appearance of new or different stakeholders in the business, and expanding or limiting input into the transition process. Missteps are common. The business owner might discover that the chosen successor lacks the leadership qualities required of a CEO. Or a child might choose medical school over the family business. These possibilities only emphasize the need to start early.
Business succession planning does not have to be a snipe hunt. Despite the poor record of success, the solution is not complex. Confronting the brutal fact that plans are needed, developing the next generation of leadership, and ensuring that the plans evolve are simple ways to pursue transition successfully. It certainly requires work, but it's certainly easier than a snipe hunt.
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