Without Execution There is No Transition
The best planning in the world will mean failure if you don’t take action. Effectively executing the plan is the key to a smooth business transition. To complete the three important execution steps you will need to:
Step 1: Become a Passive Owner
First you must begin separating yourself, your goals, your finances, and your responsibilities from the business. To accomplish this change you need to:
- Implement a business management system to ensure your human capital is trained, engaged, and accountable.
- Develop leadership and management skills through coaching and training.
- Build a management succession plan to guide the successor in their new role.
- Learn, understand, and teach the disciplines of a learning organization.
- Create an effective governance structure for communication and accountability.
Step 2: Transition Ownership
The second step involves the financial, insurance, and legal aspects of transitioning ownership. To successfully transition ownership, you need to:
- Create a personal financial plan and explore options for shared and individual assets.
- Review your estate plan to protect family assets.
- Devise an ownership transition strategy to determine who will receive the ownership: Family members, Employees or Partners, or a 3rd Party.
- Confirm the business valuation method and review buy/sell agreements.
- Investigate bank and shareholder financing options.
- Implement insurance strategies to protect your wealth.
Step 3: Strengthen Family Unity
Family is the top priority and keeping your family unified during the stressful business transition process is vital. To strengthen family unity you need to:
- Define the family’s purpose and wealth philosophy.
- Create a learning environment to help each member achieve their goals.
- Identify family values and develop a shared vision outlining what the family wants to achieve.
- Encourage estate planning and establish good decision-making guidelines.
- Hold regular family council meetings to improve communication and create a safe place for courageous talk.
By completing these execution steps you, your family, and all the stakeholders have done the work required to achieve a successful transition process. You have integrated strong family values, effective business management, and a healthy community. Congratulations, you are ready for the next chapter in your life!