The most successful businesses continue to thrive after their founder steps back from operations. However, most entrepreneurs are understandably reluctant to step away from their companies.
Here are some ways to ensure that your exit is graceful and leaves the company in a strong position.
Create a succession plan
A large portion of a business owner’s exit strategy relies on the succession plan. Essentially, the plan lays out your intentions, recommendations and critical information to your successors. In your plan, you can address a variety of details — from instructions for selling the company to a division of responsibilities among heirs and employees. The plan is similar to a will in that it allows you to express your final wishes for the company.
Succession plans are also relatively easy to modify in your lifetime, so you do not have to feel trapped in an old succession plan. You can make it as flexible and descriptive as you want.
If you want to sell your company rather than leave it to a successor, you can lay out how you want to conduct the merger with a potential buyer. It will of course be at the buyer’s discretion to take any additional recommendations after the transaction is complete.
Exiting a company doesn’t have to be a dramatic end. Instead, it can be a smooth shift from one phase of your life into a bright future.
Finding the right successor
Before you settle into retirement, it’s important to decide on the best successor for your company. You want to make sure that you have the right person or group that represents the mission of your company and wants the business to succeed.
Here are some common choices for successor:
- Family members
- A second-in-command or business partner
- Board of investors
- An outside buyer
All options have benefits and disadvantages, so the right choice depends on the type of business you run and what you feel works best for your situation.