Whether it’s a long-term planned event or the result of an unforeseen circumstance, the transition of your firm will be the most significant change your business will ever face. We often hear advisors say, “I’ll never retire!” And while that may be the case, the reality is that all firms will eventually transition; no one lives forever.
It seems to be regarded as a four-letter word in the industry, but succession planning is really just one component of your overall corporate planning and it’s simply the process of perpetuating your firm into the future – or handing over the keys while preserving value. Most people are paralyzed by the thought of their own mortality and often put off any type of planning that will lay the groundwork for a smooth transition. We always encourage business owners to start planning for their exit the day they open their doors, but the good news is – it’s never too late to start. It’s most important to remain open-minded and flexible, be realistic, and understand where you are today in the process.
When it comes to transitioning your firm, there are basically two available options – an internal transition or an external sale. The question becomes, “where do you start?” so that you can decide on one of these choices and begin formulating your plan. The following actionable steps will get you started on the right path.
Given proper consideration, transition planning shouldn’t be the dreaded process that most expect. It’s merely another, albeit important, part of your strategic corporate plan. Start incorporating the above components into your regular planning process and in time it will become something that you routinely think about and prepare for, without the trepidation that you may feel today.
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