Getting ready to sell your business can be a labor intensive time. Making sure every stage in the process is completed on schedule is critical to a positive outcome in terms of passing the baton on to the new owner. One activity which can significantly ease this transition is succession planning. (See: succession planning). Sometimes overlooked by pre-sale business owners, creating an effective handover strategy which is agreed to and shared with key personnel can make a real difference in terms of smoothing the path to new ownership. Here we take a closer look at why it is so important to engage in succession planning and highlight the main issues to take into account.

-The first step is to undertake a critical analysis of corporate functions within the context of overall business goals. Although succession planning is essentially focused on people, this analysis needs to be as dispassionate as possible. Taking a clinical approach will ensure that decisions are made in the best interests of the business as opposed to the people currently working in it. Think about the current organizational structure and consider whether it is fit for purpose moving into the new era of ownership.
 
- Once the structure has been considered it’s time to assess the people who fulfill the roles within it. Evaluate the core skills and competencies which a new leader should have and think about whether there is anyone currently employed in the company who demonstrates these attributes. Depending on the size of the business the same analysis may also be required in relation to the next tier of the structure. A new owner may be looking for a ready-made management team who can hit the ground running. Having this already in place could make your company a more attractive proposition for a potential buyer.
 
- So the structure is in place and you’ve thought about the people required to make it work, but there may still be some fine tuning to carry out. Perhaps there are people who are 90 percent right for future leadership positions but need some further development to meet the mark. This is where training could play its part. Enhancing the skills portfolio of the existing team can only enhance the quality of company outputs and is a worthwhile investment in terms of boosting the possible sales price. Other options may be to give some personnel the opportunity to gain experience in new areas, improving their potential contribution through increased flexibility. It may also be necessary to recruit new blood to complement the existing internal talent pool.
 
- Having conducted all the analysis, assessed all the competencies and come up with a workable structure with people to fill it, the next stage is to put all the information together in a concise yet comprehensive document. (See: Succession-plan-template-and-guide). It should also contain any other transitional issues which the new owner needs to consider such as licenses, contracts, leases and registrations which need to transfer. For the protection of the company and its employees it should also take account of provision for issues like insurance which need to continue as part of the transition.
 

© 2015 by Gemma Carter
After working in the city for a good few years, in finance and banking Gemma Carter decided to take a little career sabbatical. During this time she got married and became a mom. Going back into the stressful job she had wasn't an option, so she became a writer instead and pens articles on topics relating to business, finance and other money matters.