Develop your succession plan

Succession planning helps you transfer your business to a successor when you retire or leave your business.

Developing a good succession plan:

• ensures your business is ready for the change
• makes the transition out of your business easier
• helps your successor prepare for their new responsibilities.

Don’t leave succession planning to the last minute – make a plan now so you’ll have a smooth transition when the time comes.

1. Choose the right successor

You need to identify who will take over your business when you leave. For example:

• a family member
• an employee
• a business partner
• an outside buyer.

Make sure you consider what's best for your business. Also make sure your successor:

• has the right skills (or can develop them)
• wants to take over your business
• can afford to buy you out.

2. Value your business

You should regularly calculate how much your business is worth. Its value might change significantly by the time you leave, but an accurate valuation now will help with succession planning.

3. Document your processes

Write down all your business’s policies, procedures and processes.

This helps ensure that vital knowledge won’t leave the business when you do.

4. Plan for a sudden transition

Make sure your succession plan includes the key business information someone will need if they have to take over suddenly.

This will reduce stress for your family, staff and customers if you can’t run your business due to illness, injury or another unexpected event.

5. Keep it current

Review your plan regularly to capture any changes in your business or personal life. An up-to-date succession plan ensures you're prepared if you need to leave earlier than expected.