You’ve probably heard the term “succession planning” mentioned before, and if you’re like many business owners, you might have thought, “I’ll deal with that later.” It's natural, considering succession planning is challenging on many fronts and presents a conflagration of sticky issues.
Initially, there is the realisation that you may not want or be able to own and run the business forever. Confronting the idea of stepping back, either through retirement or simply seeking a different path. This often leads to questions about what you truly want for yourself and what life might look like if you are no longer running your business. What would you do next? Would anyone else be able to take on the enormous responsibility of managing your business? And even if they could, would they actually want to? You might also begin to wonder whether selling the business would be the best course of action, or if it would be better to have someone else take on part ownership or management.
The majority of these questions are fairly confronting and big existential-type questions. Unsurprisingly, it's tempting to act like the proverbial ostrich and stick your head in the sand.
However, when done well, succession planning meets the single value shared by humanity - freedom. When achieved, it will allow you to pursue something other than running your business - the freedom to design the life you want to live. This freedom may involve still spending time in your business or fulfilling functions that bring you joy. I have always believed that a business should serve the needs and desires of its owners. You are in control, and your business will evolve in the direction you choose. However, many founders reach a point where the business takes more from them than it gives. It’s important to remember that if you feel overworked, unhappy, or stressed, you can change things. It just requires intention and a plan.
One method I often recommend is the ICIGAI framework, which is inspired by ancient Japanese wisdom. This approach encourages you to reflect on four key areas. First, ask yourself what you excel at professionally. Consider what you genuinely love doing and what aspects of your work bring you the most fulfilment.
Next, think about what the market and the world need, and how your skills or business can provide a solution. Finally, reflect on what you can be paid for. These are remarkably simple questions that, when answered, will provide you with clarity on your personal place in your business. Combining this with your business plan will allow you to map out your business's future needs, and it's an exercise that will pay huge personal dividends.
Not having a succession plan in place (or one mid-way through execution) is similar to building your dream home and then neglecting its upkeep. Imagine moving into a beautiful house only to let the garden grow wild, the paint peel, and the windows gather mould. That sounds ludicrous. What about your business? You have built something meaningful and valuable; a business is a complex organism, so why wouldn't you maintain it?
If you have reached the point of considering what life is all about and what it all means for you, you represent a small percentage of business owners who even consider succession planning. Succession planning isn’t always a loud, urgent matter—it often starts as a quiet whisper. You might begin to feel a growing dissatisfaction with how you’re spending your time in the business. Perhaps you’ve found yourself looking at other industries with a sense of curiosity or even envy. Maybe you’ve started longing for something more, a different way to spend your days.
When it comes to succession, there are four main types of exit: strategic, acquihire, economic, and succession. In terms of succession, you typically have three main options. First, you could sell the business to your employees, executives, or management team in what’s known as a management buy-out. Another option would be to sell your share to your partners. Finally, you could pass the business on to a family member, whether that’s a sibling or your children.
Succession doesn’t always mean a complete exit—you may choose to retain some ownership while passing the responsibility of running the business to someone else. Each of these options offers the opportunity to create distance between yourself and the business, allowing you to experience more freedom in your personal and professional life.
In his book The E-Myth, Michael Gerber highlights the importance of building systems that ensure both the success of your business and your own peace of mind. Gerber suggests that most entrepreneurs feel like entrepreneurs for only a brief moment before they’re pulled back into their core roles—whether as a manager, a salesperson, or a technician. This may help you understand the area you need to build skills in.
As you begin your succession planning journey, it’s important to consider key questions. First, think about what your life will look like after you’ve made your exit. Where will you spend your time, and what will your days involve? Reflect on what kind of involvement, if any, you’d like to have with the business once you step back. And finally, consider the practicalities: when is the right time to start planning, and if it’s not going to be you, then who will take over? Should you hire, sell, or promote someone from within?
Succession planning can feel like a daunting task, but it’s a necessary one if you want to secure both the future of your business and your own personal fulfilment.
For more in-depth guidance, my e-book The Exit Factor breaks down the various types of business exits—strategic, acquisition, economic, and succession—into clear, actionable steps.
Josh Comrie
josh@joshcomrie.com
www.joshcomrie.com
