Succession planning for success

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Building a successful family business and enjoying the rewards with people you love can be a great feeling for many SME owners. But one thing many successful family businesses fail to deliver is a successful succession plan that highlights who will take over responsibility when the owner is ready to step down.

Despite what many owners believe, a succession plan is often harder to develop than actually selling your SME. To help you with the process we've sourced four key tips that can assist you with your exit strategy.

Be transparent

Communication is vital to keeping your family in the loop, so find the opportunity to sit down with your family and discuss the succession long before your intended exit. Discuss what you expect the business to achieve by the time you step down and gauge any interest family members might have in becoming involved. The best option is to involve everyone from the start so you can potentially eliminate any sibling disputes that may occur further down the line.

Think beyond seniority

Unfortunately it's common for owners to take the traditional point of action and simply leave the business in charge to whoever is oldest.

Although this is an easy option, it isn't always the right one. The general perception is that the oldest member will have the most experience and as a result becomes best equipped to take over, but sometimes the opposite can occur. Consider all your options and try to find an alternative that everyone in the family can respect.

Plan ahead

The best successions come as a result of a long planning process. Not only does future planning provide you with the opportunity to leave a detailed succession strategy, it also allows you to clearly define roles for family members and prepare them for their future contribution.

A strong and well thought-out plan is also a great opportunity to train family members and see if they are adequately prepared to lead in the future.

Consider employing a CEO outside the family

Although you will naturally want your next leader to be a family member, sometimes it's a good option to source a non-family CEO to keep your business moving forward. As an owner it's possible you may have expertise that your children or spouse don't, so in some instances it will make sense to hire someone with the proper training to lead the business. Just because they are your family doesn't necessarily mean they will be the right fit for your business.

There's no doubt that succession plans can be delicate especially if you have multiple children to consider. The best way to confirm the success of your family business even after you leave is to develop a succession plan early on and make changes as you see fit.

Originally posted by Dun & Bradstreet Small Business here .