All small business owners knows that a day will come when they are ready to retire or move away from running the business full-time. However, that doesn’t mean you want your business to retire with you, particularly after you’ve put so much energy into making it a success. If you want to make sure your business continues to grow even when you step away from the day-to-day grind, here’s how to identify and train someone who you believe will be a competent successor.
1. Consider family. If there is someone in your family who you’d like to take over your business, have a conversation with them early on to make sure it’s something they even want to do. If they are interested but are not currently working with you, make them a part of the business as soon as possible so they can start learning the ropes from the ground up. However, all people aren’t cut out to run a business so it’s crucial that you be honest with yourself about whether that person would do an adequate job if you truly want what’s best for your business. But if you bring this person into the fold soon enough, you can make sure they get adequate training to be as ready for the new role as possible.
2. Create an evaluation strategy. If you don’t know who would be the best person to take over, come up with a list of criteria that will help you make that choice. You want your business to succeed even after you’re gone so this evaluation period will be one of the most important personnel decisions you’ve ever made. By coming up with a list of the qualities that are important to ensuring the business’ success, you can narrow down your list of candidates to a few high performers objectively, rather than merely considering people who you feel personally attached to.
3. Consult with top clients. While you don’t have to tell your clients that you’re working on a succession plan, you can ask them how they feel about various employees in your organization. If you put your business in the hands of someone disliked by your biggest customers, they may look to one of your competitors once you’ve left your day-to-day role, making it more difficult for the business to survive the transition.
4. Find out top candidates’ intentions. Talk to your top contenders to find out whether they are committed to your company for the long haul. Also find out if they have aspirations to run a company of their own since some people would prefer not to have a job that requires so much commitment. Through such conversations, you’ll not only learn key information that can help you make a decision, but you may realize that some of your employees may be better suited to take on other roles in your business.
5. Fill the successor in on your plans. Once you’ve made your choice, let that person know exactly what you have in mind. That gives that person a chance to develop a sense of ownership in the company and ensures that he or she doesn’t look for better opportunities elsewhere.
6. Announce a succession timeframe. So that everyone in the organization is on the same page, announce the plans for succession prior to the time that you’re actually ready to retire. If everyone knows your successor will take over, say, a year from today, there’s time for other key employees to adjust to working closely with this person, and it gives you time to make this person familiar to key customers, clients and partners. During this time, gradually hand off more responsibilities to your successor so when your retirement actually comes, the successor will already be running the business.
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