Succession planning presents challenges with accompanying risks to the business and its employees. eBusinessAppraisals.com offers five tips to help you develop an orderly transition of power.

1. Top 5 Succession Planning Tips Succession planning presents challenges with accompanying risks to the business and its employees. eBusinessAppraisals.com offers five tips to help you develop an orderly transition of power.

2. Determine your successor. Like most business owners, you might easily prefer your offspring, or another family member, to take over. But you must take into account their skills and experience in assuming your role. Suddenly thrusting the family member to a position of power can be disconcerting, at the expense of the company. It would be advisable then that years before the transition, the family member join the company to learn all the ropes of the operations, from the simplest task to the major responsibilities s/he will eventually manage. This will help you evaluate the family member’s drive and enthusiasm to be part of the company and contribute to its growth, and determine his/her effectiveness in the future role. Ask yourself: Does this family member have the company’s best interest at heart, including looking after non-family employees who have contributed to its growth?

3. 2.Prepare a shortlist of qualified employees in your company as potential candidates for the position. This is especially true if none of your family members is interested in taking over for you, or demonstrates the capabilities needed for the job. Employees groomed to be a successor of an important position have the added advantage of being familiar with the office dynamics and culture. Their vision and growth strategies for the business can be expected to be more or less aligned with yours, having had experienced the framework and processes with which you operated until your position has been turned over. Ask yourself: Does this candidate embody the kind of leadership and attitude the business needs to move forward, without favor to anyone, and whose focused vision will propel the company to new heights?

4. 3. Realize that your successor will have a different way of doing things from you. You may have spent the better part of your life running your company, and have been accustomed to doing things a certain way, that you might feel the urge to step in every so often. This reinforces the essence of the training period. It must encompass all the expectations and responsibilities that your successor must live up to, to successfully carry out his future role. You must provide him with broad guidelines that will allow him to decide on his own, and if they do not always work out, be able to learn from them. During this time, as you gradually transfer the reins to your successor, be there when your advice is sought; otherwise, learn to step back. Ask yourself: How does this candidate come to a decision? What factors does he take into consideration when making one? Does he ever act just to prove he is right?

5. 4. Plan for your retirement from the company. Retirement does not mean spending time idly. On the contrary, it is an opportunity to rediscover your passions, and even take on new challenges such as venturing into a new business, or doing consultancy work in the field of your expertise minus the daily grind of operating a business. Considerations for your retirement plans must take shape soon enough as your successor takes on more responsibilities. Ask yourself:How can you fill up your days with meaningful activities? How can you go about doing things you have always wanted to, but couldn’t because of work responsibilities?

6. 5. Determine how this succession will affect the rest of the company. Your successor will need, and benefit from the solid support system of everyone in the company. It is therefore important to establish your successor’s institution to the new role. Tax, legal, and investment implications must also be identified during the succession process. Ask yourself: Are there people who will move up, or who will need to be transferred to a different department as a result of this change? Are there divisions that need to be downsized, expanded, or dissolved, based on the direction the succession plan entails?

7. Succession planning can be challenging, and business owners would benefit from all the help that they can get to navigate it. A business valuation is one such tool. To help your successor better understand the company in an economic context, a business valuation would be invaluable. It reviews all aspects of the business, from the financial documents, intangible assets, projected revenues and growth prospects. It determines the company’s key value drivers which can guide the continued success and growth of the business; and identify factors that can negatively impact the company’s value, and then come up with recommendations to mitigate them.

8. eBusinessAppraisals.com is a professional, third-party business valuation company focused on value-enhancement techniques designed to maximize the value of businesses, and meet the exit strategy objectives of its owners. We have more than two decades of advising and deal-making experience with middle-market businesses. Give your succession planning a complementary boost with a business valuation, and do your company a favor.

9. AteBusinessAppraisals.com, we provide affordable,custom solutions to help every business owner charta course to higher value. Now for a limited time, we are offering afreeassessment of your business. Contact ustoday to learn how to take advantage of this great offer! ---------------------------------------------------------------------------------------- Learn more about why Value Matters. Follow us on Twitter: @ebizappraisals Join our Linkedin group: eBusinessAppraisals.com Check out Facebook page: eBusinessAppraisals.com