No Plan for a Succession Plan?

By Jenifer Bartman
Published: November 7, 2018 | Last updated: March 22, 2024
Key Takeaways

Five practical tools to get your business on the road to succession planning.


Every day, business leaders who have been at the helm of their company for many years have fleeting thoughts about what the future might hold. How long do I want to continue to work? Should I sell my business? Who could manage my business? Is it time to make a move? Perhaps the biggest question is this: How do I even get started with addressing these questions?


A Retirement Plan Is Not the Same as a Succession Plan

It’s not uncommon for business leaders to meet with their advisors from time-to-time to develop their personal post-sale financial plan, establish family trusts or work through tax planning strategies. Although all of these are necessary and important tasks, there is often one very important component missing: How to bridge the gap between a post-sale retirement plan and the current state of a company. In other words, business leaders might be good at planning for life after selling their business, but are not so good at undertaking the succession planning process. Why is this the case?

Plan on Having to Make a Plan

One reason could be so simple that it isn’t fully appreciated: Many businesses don’t do a very good job of planning, period. Annual budgets aren't adhered to, business planning is too much trouble and sales planning… well, all sales budgets are too inflated to be useful, right? It’s no wonder the succession planning process never gets off the ground.


Here’s the problem with businesses that don’t plan: since planning is a process that is developed through practicing it, these companies don’t have the opportunity to generate competency in this important area. A disciplined planning process, starting with short-term and more straightforward plans (such as an annual budget) can help staff members develop the competency to approach more complex initiatives, such as business and succession planning. What’s more, the corporate history and financial results that are compiled during the process represent an information base that is integral to succession planning.

So, in the spirit of walking before you can run, here are five ways to get the planning process started in your company today:

1. Get the Right Assistance

As with any new task, it can be much easier to design a process and overcome roadblocks by engaging the right advisory expertise. Business advisors that have helped companies work through the annual budgeting or business planning process can provide valuable insight into establishing an appropriate approach and avoiding common pitfalls. This course of action typically brings far more value to a business than its actual cost in terms of time savings and identifying best practices for use over the long-term.


2. Develop Standardized Documents

As with any key process, taking the time to develop templates and documents that can be used repeatedly is a much better approach than starting from scratch every time. A standardized budget template – including information to be collected, supporting calculations, assumptions, and financial statements in the proper format – can greatly expedite the process and help users become more productive when undertaking a new initiative.

3. Assign Roles and Responsibilities

The planning process should be the responsibility of all key management team members within a company, not just a task relegated to a particular department. Ensuring that roles are clearly defined and that a number of people are responsible for providing information to be included in the budget offers the following benefits: Better information, planning and training across the organization, and enhanced buy-in of the result.


4. Set (and Adhere to) Timelines

Like any other initiative, the planning process requires formal deadlines that are not simply kicked down the road if they are not met. Planning can sometimes take a backseat to other activities that are considered to be more relevant or immediate, and maintaining this type of attitude will not enable a business to develop the competency that is required to support more complex initiatives, such as succession planning.

5. Keep Planning Relevant

One of the fundamental mistakes that companies make is failing to keep the planning process top-of-mind, resulting in budgets and other plans becoming irrelevant as soon as they have been developed. It’s critical to ensure that actual results are compared to plans consistently throughout the year (monthly is ideal) and variances investigated and resolved. It’s no wonder that companies that fail to do this find little value in the planning process. Even more, striving to meet or beat the plan is the real challenge, so don’t miss out on this valuable opportunity to enhance corporate performance.

Start Today

Although this might seem like a lot of work, think of it as an investment. The key is to start today, take a gradual approach and build planning into your regular business routine. Doing so will get you one step closer to starting the succession planning process, as well as actually implementing your post-sale financial plan.

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Written by Jenifer Bartman

Jenifer Bartman
A business advisor known for her practical and solution-based approach, Jenifer Bartman assists companies in transition, including early stage, financing, growth, and succession/sale of business. Her areas of expertise include strategic and business planning, financing readiness, executive coaching, marketing, and succession plan development and implementation.

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