Selecting a successor is much more difficult for most entrepreneurs than choosing a spouse because they hate to think about ever leaving the company they started.
It’s just like going to the dentist for most business owners. The last thing that any entrepreneur wants to admit is that he or she is replaceable. After all, these owners started the business from scratch, struggled through the tough early years and usually have spent more time keeping the business above water than they have with their families.
Eventually, most business owners reach the point in their lives when they’d like to free themselves from the day-to-day job of running the business. They may not be ready to walk away entirely, but they do recognize the need to find someone with the energy and talent to keep the business going or take the business to the next level. Usually, they’ve been too busy earning a living and trying to build the business to do much in the way of succession planning.
The secret to finding a replacement for yourself as a business owner is to look for someone with skills and experience you lack. For example, if you’re best at the operations end of the business, you may need someone more skilled at sales or marketing. If your strong suit is engineering or technology, your ideal successor might have a background in finance or office management. It’s important to decide whether you need organizational growth management to complement your original business building skills or whether your successor’s primary discipline should add to your own strength in marketing, production or finance.
For the typical American company seeking growth, an ideal successor might be a man or woman with a good international background. For your company to continue to grow, most experts today agree that you need to think globally. One common denominator among successful entrepreneurs is a healthy ego. Even for the business owner with a perfect successor in mind, it’s difficult to believe that anyone can really take your place. However, if you’re beginning to want to reduce or eliminate your everyday involvement in your business, now is the time to start succession planning.
Prudent business owners should meet with their attorneys, accountants, insurance agents and investment advisors to create a tax-saving succession plan.