Create a Business Transition Plan that Works

For many owners, a business is more than just a business.  It is their bread and butter.  Their security.  Their legacy.  Because of this, it is no surprise that business transitions are such a hot topic.  People have a lot to lose if the business transition doesn’t go well.  However, according to a study done by the Exit Planning Institute, 88% of business owners looking at transitioning have “no written plan to transition from the current owner.”

So, why is that?  Why do people wait so long to start planning their business transition if it means so much to them?

What we often find is a mentality that there is a simple formula or an easy solution for a successful business transition.  After all, there’s an endless amount of “how to” books and articles out there that lay out exactly what needs to be done to carry out your transition.  However, while the method and steps presented may have worked well for the author, it doesn’t necessarily mean you will achieve the same outcome, simply by doing exactly what was presented.

Types of Business Transition Plans

There is no one way to make a perfect business transition plan.  Every organization has unique dynamics that an online template cannot provide a simple solution to address.  Instead, the purpose and needs of the organization should be taken in account and a plan should be built around those needs.

For example, some of the different types of business transitions we’ve done work with are:

• Transitioning to a new CEO
• Transitioning to the next generation and succession planning
• Exit planning
• Crisis management when the unexpected has happened
• Integrating two company cultures through mergers and acquisitions

With each of these transitions, there needs to be a different strategy and approach due to the uniqueness of each case.  With exit planning, this may mean preparing a company so that it is ready to be sold or helping owners transition out of the business.  With M&A work, this involves aligning the values of two organizations and figuring out how the two entities can start moving forward together.  Because of subtleties inherent in any transition, it’s important to recognize that a standard template won’t necessarily work as a good business transition plan unless you’re willing to put in the work to customize it to your needs.

Recommendations for Your Business Transition Plan

Successfully creating a business transition plan means taking the time to actively think ahead to what the needs of the organization are for the future.  One of the best ways in which you can be proactive, rather than reactive, is by planning early.

Here are some questions to ask yourself:

• What do I want for my business?
• What do I want my legacy to be?
• Who will lead my business after me?
• How will we respond when the unexpected, such as a death, happens?
• How can we develop high-potential leaders?
• What are the values that will continue? How will we do this?
• What has been our organization’s formula for success?

By planning for these things and having conversations with your team about the direction of the organization, you can avoid scrambling to figure out how your business with survive beyond you.  Not only that, it will give you the confidence that your organization is in the proper hands with the right leaders in place once you execute the transition.

In subsequent articles, we will address the nuances of different business transitions to give you deeper insights into how you can plan ahead.

If you still find yourself stuck, however, The Utech Group has a team of experts with backgrounds in Marriage and Family Therapy, Team and Leadership Development, Culture Assessment and Team Dynamics.  If you’re in need of assistance in developing or working through your business transition, reach out to our team and we will help you build a customized plan to make your transition successful.