What is a Succession Plan For Your Privately OwnedBusiness?

To answer the question "what is a succession plan" you've got to first come to grips with what it is not. To be successful a family business succession plan must be seen as a process and not a one time event.

Trying to provide a definitive description of what is a succession plan when not being willing to first face the fact that not only is it a process, it is one that continues forever, will cause you more stress and frustration than you can ever imagine.

Considering what is a succession plan seems to lead to common misconception for many business owners. Business owners picturing their succession planning as an once in a lifetime event, perhaps like taking a cruise - something they do only once in their lifetime.

Or because in their heart of hearts they know once it begins it will never end - they put off addressing it in the first place.

The savvy business owner knows that their survival as a viable business into the next generation and beyond requires succession planning strategies that become part of the everyday environment.

Think about it, as soon as the succession plan from your parents' generation to your is in motion - it's time to consider your growing family. And take it from me, your kids will be going through the same considerations in the blink of an eye.

So, what is a succession plan? To be successful (affordable, practical, doable, etc.) it becomes part of the ongoing climate - begun as early as possible and adjusted often in order to keep the planning focused in the right direction based on the family's ever changing dynamics.

What is a succession plan is most typically about developing leaders and managers from within your immediate family to run the organization and own in the future. A by product of the fair vs equal issues you'll encounter along the way will be covered elsewhere.

That may not be your situation. You may have a nephew or neighbor who will fill the role of your successor.

The comments below are still valid. The legal details and the elements of actual ownership transfer should be taken up with your professional advisors, after reading and considering these observations together as a family unit.

For most of you, figuring out which or if one or more of your kids will be part of the company's future is Job # 1.

When it comes to determining who's going to run the place in the next generation, Historically business owners have taken one of two approaches with their offspring.

Some choose their potential successor very early, based on their implied interest in the business, in terms of their interest in doing the work, like wanting to work in the plant rather than play sports.

Or they favor a hands-off approach, maybe even encouraging their kids to choose a different profession as a result of their apparent disinterest in working there after school and during summer vacation.

In the tech savvy world of the 21st century, along with all the cool things their kids are learning - it's easy to see how the business owner might feel unable to compete, to the point that they unconsciously push away all but those who show the greatest interest in the business.

My observations have demonstrated that both the hands-off approach or the early recognition of interest in the odd jobs around the family business are huge mistakes.

Time and time again I have seen people leave the family business who should have stayed. And I have seen them return after years working for some Fortune 500 company to try and recapture years of lost momentum.

Family business owners should be more aggressive from the very beginning when trying to identify and motivate their future successors, especially considering the many ways the younger generation can be involved in the operation today - even without living there, rather than leaving the outcome to chance.

Don't let them overlook the important opportunity that belonging to a successful family business operation offers!

Ok, so maybe it's not about the big paycheck from some important company to start with, it is however a chance to accomplish something that will be around long after they're gone, a chance to expand the business as a continuing symbol of your families accomplishments, and something they will own they can pass to those who follow them. This is no a dream, this is a reality.

Successful family business owners take every opportunity, whether it's at the rare family dinner or going through the McDonald's drive-through, to talk about the problems and challenges of owning part of the American dream.

These successful business owners are concentrated on the future and they are always looking for input and ideas they may not have considered or knew about and forgot.

You'll be amazed how a 12 year old can ask questions that will bring you up short and bingo the light goes on.

Successful family business owners make discussing the business and its impact on the family and the community into a never-ending story.

They bring others into the conversation early and often, report how their last suggestions turned out, and show how they value the opinions of there children no matter how young they are.

These successful family business owners know full well that they are step by step by step unleashing the power, creativity, and imagination of their energetic youngsters - people not bound up with the presumptions of what will and what won't work.

Young successors in waiting who will carry the family's banner into the next generation with even greater success than the folks who've gone before them.

The importance of knowing what is a succession plan can not be over stated when considering the importance of your businesses leadership skills for your succession planning success. Leaders listen to their people and successful industry leaders for best leadership results.

Hi folks I am Loida Guevarra and I love sharing useful information.