Here are two great succession planning checklists.

This one is from the CFIB. This one is from Downey & Company, a CPA firm.

It’s great that there is so much information available on succession planning. However, there’s a common feeling I get from all succession planning checklists – aside from getting a business valuation, they all treat succession planning like the business is transferable.

Unfortunately, many aren’t.

Businesses that are transferable have common elements:

  • Strong markets
  • Standard service or product offerings
  • Teachable processes for selling and fulfilling demand
  • Profits and predictable cash flow

Without these basic elements businesses are worth less to new owners – even family owners. So, I’d love to see the following added to the owner’s succession planning checklist:

  • Verify the sustainability of the business – market and industry trends, repeatable revenue, diverse customer base, well defined competitive advantage, well defined core competency
  • Verify the transferability of the business – company culture, management team, advisory resources, all operating processes – HR, sales, manufacturing, delivery, finance
  • Verify the role of the owner – working on, not in the business
  • Verify the value the business on that basis

Businesses that are valuable to their next owners are easier to succession plan for. And succession planning on a business that isn’t transferable is a waste of time.

Here’s how Boardroom Metrics helps private business owners: