Blog Post

Business succession planning is an important subset of estate planning for most business owners or partners, particularly those with families. However don’t be mistaken, even if you think there’s no one who can step into your shoes right now it’s still enormously important to have a plan to ensure a stronger, more successful future. You can begin right now by taking these steps.

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Smart business leaders know they need to have someone in place who can sub in or replace them in case of emergency or opportunity. But sometimes it doesn’t look like there’s anyone who’s appropriate or ready. Here are some things you can do.

Many articles and books have been written about succession planning and how important it is for company longevity and shareholder protection. But most of the advice focuses on the selection of and transition between CEOs and assumes things like a fully functional board and a fairly robust organizational structure.

In many privately owned and operated businesses, though, it’s tough just to predict what will happen next quarter, let alone years into the future, and when you’re the CEO, there may be days when you wonder if your team members know how to do their own jobs, not to mention yours.

Still, don’t be deterred by the fact that there’s no one who can step into your shoes right now. Whether it’s your dream to move on to start and run three more businesses, or you worry about being hit by that proverbial bus, know that if you build a workable company-wide approach to succession, you’ll ensure a stronger, more successful future. You can begin right now by taking these steps.

Review your goals for the business as they exist today.

Also review those goals for as far into the future as you can anticipate. This will give you a framework and a focus, rather than leaving you to worry about every bad thing that could happen or every possible contingency that might arise. Start with what you’re sure of, because you can always build out further from there.

Know your people as people.

What are their goals and ambitions? Are they curious, or content to do what’s set out for them? Can they tolerate experimentation and the occasional misstep? Do they prefer to work independently or highly collaboratively? How committed are they?

Which individuals are the last one in and the first one out every day? How many go the extra mile?

Evaluate your bench for skills and experience.

Don’t expect any single person to be or do everything, but do explore what else each person could do if it were necessary, and how these people could work in concert together.

Would any of their successes be transferrable to other parts of the business? One of my clients maps the readiness of everyone at the supervisory level and above to see which parts of any other leadership job he or she could do in a pinch. Don’t forget your suppliers, either, or even your best competitors. Could any of them support your staff with aspects of the work that might be needed?

Draft a development plan.

Identify cross-training opportunities both to bring to light interdepartmental connections and to let emerging leaders see how decisions in one part of the business affect other parts.

Provide progressive learning experiences, in which you introduce individuals to the serious decision-making and leadership needs of the company.

Let your leadership candidates shadow you when you meet with a prospect, or conduct a due diligence discussion with a potential acquisition.

Discuss the pros and cons of choosing a supplier rather than just making the choice yourself. Consider creating additional levels or lateral roles that could let emerging leaders expand their responsibilities for other employees and results. And consider formal coaching and training or education to help candidates reach their potential more quickly and work more productively with their colleagues.

Prep your board if you have one.

If you don’t have one, prep advisors, like your lawyer and accountant or banker, and the close family members or friends who might help you in the case of an emergency. Make sure they’ve had a chance to get to know your most important employees, or at a minimum, to know about them.

Document an emergency plan.

This might be equivalent to the notes you write up when you go on vacation (you do take vacation, don’t you?), or when you’re anticipating, say, a severe weather event or other travel problem preventing you from getting back as expected.

At a minimum, cover such things as who needs to be informed about your absence, how to handle payroll and who should make sure that deliveries and invoicing continue undisturbed. Don’t just pull this out of your own head. Get all your crucial personnel together to discuss. You’ll learn a couple of things that they do behind the scenes, and they’ll learn about things you’ve never thought to articulate before.

You can always revisit and redo any of these components whenever new developments arise in your business, your staffing, and even your own goals and intentions. In the meantime, try to be conscious of explaining the way you evaluate opportunities and how you deal with tough situations.

Even if you never use your succession plan for its intended purpose, the process of evaluating and developing your people will strengthen your organization and immediately move your business forward.

Reference: https://www.entrepreneur.com/article/316848

Call Fraxedas Law and let’s talk about how we can get you set up – or your family and heirs – for success.

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Contact us today for a free consultation. 561.288.9788

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Robert Fraxedas

Robert Fraxedas is an accomplished attorney with 15 years of legal experience, focusing on estate planning, probate, elder law, and business planning. In 2002, Mr. Fraxedas graduated cum laude from the University of Florida with a bachelor’s degree in philosophy. There he was a National Merit Scholar and a member of the esteemed Phi Beta Kappa Honor Society. In 2005, Mr. Fraxedas graduated from the University of Florida’s Levin College of Law. After practicing for 10 years, Mr. Fraxedas obtained his LL.M. Degree in Estate Planning from the University of Miami School of Law, graduating cum laude.

Mr. Fraxedas is an experienced, knowledgeable and hardworking attorney who cares deeply about his clients. He will get to know you, your family, and your goals and develop a personalized plan that is tailored to meet your needs. Whether it’s a simple will, a complicated probate, crafting a trust for your children, or obtaining Medicaid or other government benefits, Mr. Fraxedas is committed to taking care of you and your family as if it were his own.