Sooner or later, it will be time to hand over the reins of your company to someone else. It might be your child or another relative who has worked for the business, a trusted long-time executive, or a complete outsider.
How to choose? Though your decision may not be easy, these suggestions could help.
- Spell out your intentions to the rest of the family and give them a chance to weigh in. Don’t spring your retirement on them without any warning.
- Don’t make any hasty decisions. Draw up a list of your candidates’ attributes and also consider their drawbacks. Try to avoid preconceptions and concentrate on actual performance.
- Develop a comprehensive job description. This is especially helpful if a clear-cut successor doesn’t emerge right away, or if multiple family members seem qualified. Then look again at individual strengths and weaknesses for filling that position.
- Don’t wed yourself to the idea of an in-house solution. Selling to an outsider could maximize your profit, and the company might benefit from a brand-new perspective.
- Get away from the office. It will be easier to sort through your choices without the usual distractions.
Finally, seek guidance from your business advisors. We can provide assistance on choosing your successor and can also coordinate other aspects of your succession plan.
This article was written by a professional financial journalist for GEF Financial Group and is not intended as legal or investment advice.