Do you have an exit plan for your small business? Part 1
Creating a succession plan will help to keep your business running on track.
As a small business owner, have you considered what you plan to do with your business when you retire? Do you have an exit plan developed? Have you thought about it at all? It is likely you have not, so this article may help get you started. Here are a few tips to consider when developing a succession plan:
If you have a family member invested in the business with a strong interest in assuming ownership upon your retirement, then it is never too early to ensure they are adequately trained and committed to doing so. Also, a formal understanding would be a good idea so all assumptions, especially related to finances, can be clearly defined in advance.
Engage local young professionals
As a small business owner, if you have a plan to retire in the next 3-5 years, consider reaching out to and engaging some entrepreneurial young professionals in your community. Ranging in age from early 20s to late 40s, these individuals tend to have a wealth of innovative ideas, energy and motivation to be entrepreneurial.
Perhaps consider hiring them on so they can learn your business and you can mentor them, with an understanding, in principle, that they may have the opportunity to take over upon your retirement.
Engage current employees
Similar to the young professional example above, do you have any employees who have shown an interest in taking over when you retire? Are they capable and committed? Are they of the personality that a transition from worker to owner would be detrimental or beneficial to organization? If the answers to these points are positive in nature, then consider engaging that employee or employees to collaboratively develop your succession plan.
In part 2 we will take a look and some tips in the event you would like to make a clean break from the business when you retire.
Succession planning is often an overlooked process. By the time it becomes a priority, the timeframe may be too short to proactively develop a viable plan. Consider taking the time to develop and explore the possible ways to transition your business when the time comes. You never know what the future may hold in store.
If you want more assistance with succession planning ideas, you can consult your local Small Business Development Center, the U.S. Small Business Association, the local Chamber of Commerce, Economic Development organization or Michigan State University Extension Community Development Educator in your community.
Michigan State University Extension offers a variety of programs to provide expertise, education, and development of communities throughout the state of Michigan.