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Succession Planning Basics for Family-Owned Businesses

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Ensuring your business survives after you are gone requires a solid plan. While the planning process may seem overwhelming at first, do not let that discourage you from getting started. Once you learn the basics, it will be easier than you anticipated. Here are a few simple steps to help guide you in developing your plan.

1. Choose a New Leader:

Mature businessman speaking to colleagues
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Determine if you will have a family member or non-family member assume the new leadership role. Be sure to make a selection based on who has the best potential for being successful as he new leader. Try to avoid making an emotional decision.

2. Mentor the Next Generation:

Develop a training program to mentor the next generation to effectively take over the reigns. Clearly define roles, responsibilities and expectations so everyone is on the same page. Empower your successor to make management decisions, and learn from their mistakes while you are still there to coach them through the transition.

3. Create a Realistic Timetable:

Your timetable should include when control of the company will be shifted, and a training timetable for the new leader.

4. Develop an Exit Plan:

Determine how you will retire or leave the company, and what lies in your future. As your successor takes on more management responsibilities, be sure to spend more time away from the office. This will help make the transition run smoothly, and demonstrate your confidence in the new leader’s ability to manage the business.

5. Let Them Lead While You Still Can:

Letting go is a difficult thing to do but to ensure your company’s future, you must select, train, and install a new leader while you are still living. Have confidence in their ability, and let them lead.

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