Here are two great succession planning checklists.
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:
- Our private business value assessment tool uncovers the opportunities for making businesses more transferable to new owners.
- Our team of Accomplished Executives provides seasoned mentors, leaders and subject matter experts, helping business owners get comfortable working on, not in the business.