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Entrepreneurs need to start the succession process

It’s every entrepreneur's dream to start a successful business and possibly pass their company onto the next generation. However, it’s not as easy as stating who inherits your business when you retire.

Every company needs a succession plan for the moment when the founder steps down from their post. There are several steps to ensure a successful transition and a proper exit for a business owner

Establish your goal

Every owner has specific ideas for the future of their company, but your successor may not share your exact vision. To avoid future problems, you should establish goals for the business and the next generation of management.

Some goals to consider include retirement, family involvement, professional management, leadership and collective vision for the company. Once you figure out your goals for the family business, it’s time to identify the successor.

Choose your successor

Whether it’s a relative or an established manager, you have to choose someone to run the business after you leave. The best way to select a new forerunner is to evaluate your goals and choose the best candidate based on their qualifications and vision for the company.

Again, it can be an employee or a family member. It doesn’t matter who it is as long as you trust them to continue the company’s legacy during your retirement. Trust is vital for a successful transition after a succession.

Develop a plan for a transition

Once you choose a successor, you need to develop a strategy for transitioning the business from one person to another. The first consideration is the timeline. When do you want to retire? How long will it take to train in a new CEO? Will you need time for employees to adjust to new leadership?

There is also the economic transition; do you want to gift your shares of the company to a successor or do they have to purchase their fair share beforehand? There are many questions you have to ask before any transition can take place.

Your best strategy is preparation. Work with an accountant, your successor and other experts to ensure your business survives the change in leadership and continues a future of success.

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