How can you choose a business successor?

Mar 15, 2021 | Estate Planning

Eventually, you may want to leave your business behind. If you are looking forward to retirement, then your business needs to be a part of your estate plan.

Inc. describes how business owners should choose their successor. First, you want to give yourself at least two years to find the perfect one.

Find successor candidates

Does your successor have entrepreneurial success? Look to your executive team for those who have had success. You should choose a person who can create new revenue streams and who excels at controlling operations. If necessary, you can choose two people to fit that role.

When you do not have candidates within your company, look elsewhere. If good candidates are leaving a rival company, then you should approach them. If they fit with your company culture, you could consider them as successors.

Challenge successors

To pick a successor is not always as simple as making a good-faith choice. In a lot of cases, you will want to test the successors. You should assign potential successors to large projects. For instance, assign one candidate to a challenge of developing new products and adding revenue. You may want another to improve the cash flow of the company.

Once you know who you want to be your successor, you need to allow them into board meetings. Without information, they will be unable to successfully take your place when you leave the company. You want the succession to be seamless so that it does not interrupt your business.

When choosing a successor, you need to consider the traits that make someone successful.