Planning for Succession: Is Everyone Ready?
June 10, 2009
When it comes to succession planning and having exit strategies in place, a great many companies, their owners, and their key executives, are far from ready. Some have well thought out plans and good documentation that cover both contingencies and eventualities. Many of us can talk about who and what may come next but it’s all talk. And a few of us are in denial.
What are some of the contingencies you need to prepare for?
- Your accidental death or that of a key employee
- Your accidental temporary disability or that of a key employee
- Your accidental permanent disability/incapacity (physical or mental) or that of a key employee
- You, or a key employee loses interest in the company, the profession, or in each other (few experts traditionally prepare for this contingency, but more are planning for it every day)
- Weariness (this is a condition I have discovered among entrepreneurs. No matter how much you love your work, your company, and no matter how integrated it is with your ego, there come times when weariness just saps your energy. Sometimes a good vacation cures weariness. Sometimes it lasts a long time.) A plan to protect the organization should be prepared for when you “aren’t there.”
What are the eventualities you need to prepare for?
- Retirement
- Life after work
- Death
Think about these contingencies and eventualities. If you don’t have a written exit strategy/succession plan in place that covers these possibilities, you may be at more risk than you thought. Buy yourself some peace of mind, put it in writing and let someone you trust know what and where it is. Simplest solution, hard copy this page and pencil in answers to the “what if’s.” That will keep you until you can put together a more formal plan that covers all your risks. Your succession consultant, lawyer, CPA and/or financial planner can all help.
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Good articles on your blog on a topic most folks never consider until they are forced to and thats when it gets tough.
LouAnn´s last blog ..3 financial statements you must know