Succession Is Not a Plan, It’s an Outcome

By Trip Holmes

Throughout my career, I have worked with an array of clients handling the succession of their family-owned businesses. Some business owners have a plan, some have none at all, and some are handed ownership of the business from the passing of a loved one. No matter the situation, it’s important to remember that succession is an outcome rather than a plan.

According to a 2021 Family Business Survey: US Findings by PwC, only 34 percent of family businesses have a robust, documented, and communicated succession plan. For those who do not yet have a plan, there is a lot at risk. Successors who are left without proper knowledge and training will not have the ability to drive the growth of the business. Additionally, if leadership is given to unsuited individuals, the foundation of the business will collapse. Just like any business decision, succession plans are strategic and developed and adjusted over time.

Define Your Goals

If you’re a business owner, now is the time to step back and visualize your business operations without the presence of your leadership. Do you see your close family members stepping in? Do you see an employee taking charge? But most importantly, what do you see your business achieving in the future? Before planning your succession, you should consider these questions and visualize your desired outcome.

The Planning Process

After defining the goals for your succession, it’s time to identify the strengths and weaknesses of your business. Wherever there is a weak link in the management chain, the choice is to start training that person to become a strong leader or to start looking for someone new that can fill the gap. It will take time to address each position of the business, but once you have solidified your roster, you can begin training.

Training

No one knows your business better than you. It is your responsibility to spread your knowledge, insights, and wisdom amongst your team of successors so that they can execute your vision of the business. The goal is to develop the skills and knowledge of each successor so that they are prepared for any bump in the road. This will consist of hands-on training and real situational decision-making so they can earn respect for their future position.

Generate Opportunity

One of the biggest mistakes business owners make when planning their succession is not guiding the direction of the business. If you leave your successors with the impression that they will keep doing what they’ve always been doing, it will set the business up for failure. It’s crucial to leave successors with guidance toward future opportunities for the company. Spark thought and share your entrepreneurial mindset to ensure a team of leaders who will do what is right for you and your business.

Sabre Capital Can Help

For more than 35 years, I’ve enjoyed working with family business owners, helping them exit according to their plans and helping them get to that biggest transaction of their lives. Along the way, we can help you find the right answers for your succession plan to generate the outcome you want. Contact us today to get started.