PREPARING YOUR BUSINESS FOR SUCCESSION

As a CEO embarking on the early stages of succession, your goal is to create an organisation that can sustain itself if you are not there.  

 

In succession, is to see a business successful in the future while at the same time being independent of the outgoing leader. 

 

One very useful way of determining how to make your business operate without your influence is to ask the questions: "What would the business need to do to make its value to a buyer - one who has very little experience running it?" 

You want to leave your heir a business in a good condition as it would need to be if you put it on the market and expected maximum value for it.  

WHAT BUYERS OF BUSINESSES WILL PAY MORE FOR:

  • Upward growth trend in sales and profits.  

  • Good location for now and the future.  

  • Attractive product in high demand now and in the future.  

  • Marketing program focused on defined market segments.  

  • Trained staff empowered to assume responsibility.  

  • Reliable financial statements and management reports, and good controls.  

  • Up-to-date facilities and equipment.  

  • Standard procedures and policies in place.  

  • No regulatory threats or potential litigation.  

BEGIN WITH STRATEGY

Strategy of the business is important for two reasons: 

 

  1. You need to assess what will make the business successful in the future and what it needs in the way of development or change in order to accomplish success.  

  2. You need to be able to match the company's strategy with the talents and abilities of the eventual successor.