Planning for succession in business is an extremely complicated
issue. In some cases, the time for succession has arrived, but
there has been a lack of planning for the future because it's
often difficult to accept there will be an ending time for current
ownership due to retirement or death. Whether the business is
being transferred to relatives, or someone is buying the business
and keeping the current owners on staff to help through the
transition, it is vital to the continued success of the business to
have clear expectations, timelines and a binding contract.
Large companies have to think about this too. For example, GE
had a succession process that began in 1994, and after six years,
when Jack Welch was about to retire, GE announced that Jeffrey R.
Immelt, head of GE's Medical Systems division, would take over.
Let's look at five keys to a good succession plan.
#1 Timelines are imporTanT
In the transfer-of-ownership scenario, we need the longest
timeline possible because identifying and grooming the person
or people who will be assuming control will take time. I recently
visited a dealership whose manager might be the right person
to take over the business. He had great knowledge of sales,
inventory and ordering and was good with employees and
customers, but he had not been trained on tracking monthly
numbers or the financial components. I suggested to the owners
16 NOVEMBER 2014 OUTDOOR POWER EQUIPMENT www.outdoorpowerequipment.com
Feature Story | Best Business Practices
■ By JeFF SheetS
Succession Planning:
5 tips on how to start
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