Most manufacturing business owners are much more interested in starting and running their shop than planning for the day they step away from it.
Some owners have a vague idea about when they will eventually retire, but have no set plan as to when and how that will happen. Others assume that family members or key executives will take over someday but, again, have no concrete plan in place. Then there are those who simply can’t conceive of ever leaving their business.
Time and circumstance, however, have a way of altering one’s perspective. Retirement that once seemed so distant or out-of-the-question suddenly looms large. Family or colleagues expected to take over the business, but who never saw a solid transition plan, have moved on. Then there are unanticipated health issues which can force actions that reduce the company’s ultimate value.
While no plans for the future are perfect, having no plan at all can be downright fatal. That’s why it’s important to think through a desired outcome for yourself, your loved ones, your employees and the business you worked so hard to build.
We asked the business advisors of Brixey & Meyer, Inc. who have helped hundreds of business owners create successful succession plans, for their advice. They cite ten questions all business owners should ask themselves to begin preparing a well thought out and documented succession plan. Having such an instrument in place provides peace of mind to the owner, reassures the employees about their future, and provides the opportunity to maximize the value of your company when you’re ready to move on to the next phase of your life.
Ten Key Succession Planning Questions
- What is your personal vision and timing?
- Do you plan to sell the business? If so, to whom?
- How much is your business worth?
- How will you retain key employees?
- How sound are your financial statements?
- What do you need to know about insurance and buy-sell agreements?
- How dependent is the business on you?
- What is your company’s culture?
- Are you investing in innovation and R&D?
- What is the next step?
In future blog postings we will examine each of these ten questions in detail and offer suggestions to help you as you develop your own plan.