Business-Minded Legal Solutions

What should you do before someone else takes over?

Entrepreneurship can allow incredible success and opportunity for those who combine creativity with perseverance. If you’ve formed a business, you understand the risks involved, and you can take pride in the challenges you and your team have overcome.

Creating a comprehensive business plan was a necessary part of beginning your venture. However, do you have a strategy in place to keep things moving forward once your involvement draws to a close?

Documentation for continuing business operations

The termination, retirement, incapacitation or death of a business owner can be detrimental without a succession plan in effect. The same may also be true for someone in a key management position.

Depending on a company’s size, detailing the definitive changes of a leadership transfer can provide the continuity necessary to remain in the black. Thorough documentation could also reduce stock fluctuation or the entity’s tax liability when control changes hands. Yet, what considerations might factor into your plan?

Three strategies for a change in leadership

Anyone stepping into a decision-making capacity will need access to the information and tools required to guide their next steps. Before you hand over the reins, you will likely want to strategize how to protect your legacy.

Considerations for a succession plan might include:

  • Define success. A clear and agreed-upon vision can help pave the way for a smooth transition. Meanwhile, a lack of communication could divide focus between varying goals.
  • Prioritize competence over loyalty. Some employees may have been committed to you from company inception. Yet, do they have the knowledge, skill and grit required to weather the potential storms they could face in their role?
  • Provide mentorship. When possible, the early selection of someone to take your place can allow you time to help them develop in their new position. As you ease your way out of your role, empower him or her to lead, while still having the opportunity to consult your wisdom gained through experience.

The insight gained and connections formed throughout your tenure inevitably contributed to your ability to make choices based on the best interests of the organization. It will take time for anyone to gain respect and develop their leadership style. However, providing as much information as possible is a good step toward seeing your dreams continue to live on, regardless of your ongoing involvement.