3 Myths to Avoid in Business Succession Planning
For successful business owners concerned about the longevity and continued growth of their organization, succession planning is an absolute must. Unfortunately, many myths, fallacies and anecdotal evidence prevent individuals from devoting their time and energy to crafting a comprehensive succession plan. While each business and every situation is different, business owners are wise to contact a law office to see through the numerous myths that surround the creation of a succession plan.
Even though myths and flawed thinking can vary depending on the business and its scope of growth, certain factors are common, including:
- Only those thinking about retirement should write a succession plan. Many individuals invariably link these two concepts – retirement and succession planning. While there is some truth in the relationship, it is not an iron-clad proposition. The succession plan is put in place to identify future learning opportunities and management potential. Owners design the succession plan to allow employees to improve and move up the ladder of responsibility – not to encourage them to force an ownership change.
- The next generation of leaders is not prepared to lead. This, unfortunately, boils down to an ironic misunderstanding of the scope of the business succession plan. The focus of the plan is to identify future leaders and pair them with the training they need. From mentorship to exposure to different functional groups, the goal of the succession plan is to identify both strengths and weaknesses in the next generation of leaders.
- Selling the business outright is a better option. When a business owner faces the prospect of estate planning or a divorce on the horizon, it might seem like the better option is to simply sell the organization than to worry about its future. While this might be true in some situations, it is still wise to consider what a succession plan might look like from the perspective of employees, customers, vendors and organizational partners. To simply sell the business could sever those relationships and spell the end of the company.
Contact the Law Office of ZM Law Group
No matter the size of the organization or the scope of your company, it is wise to have a succession plan in place. Not only can a law office provide a certain measure of peace of mind, but it gives you an opportunity to thoroughly examine your management team – and their potential successors – to identify any weak spots that can be improved through training or recruiting.