Exit & Succession Planning Pt. 1
Business owners know that the decisions of today, are the realities of tomorrow. In this two part series, we’ll delve into the importance of effective exit planning and the role of M&A in such processes.
Proactive Succession Planning
The central mandate of succession planning is to identify and condition future leaders to maintain sustainable operations inside your business.
While at first glance, succession planning may seem like an immaterial formality, the case could not be farther from the truth. Unfortunately, all too often we see businesses owners take a reactive approach towards succession planning. In such situations, the business owner waits until an unforeseeable circumstance presents itself to begin thinking about the necessity of succession planning and its role in their business. Without time on their side, they’re forced to look for senior executives who are unfamiliar with the company’s operations. Although there may appear to be a healthy batch of candidates with proven track records, bringing them into your company does not guarantee they will perform with the same level of success.
Succession Should be Stitched into Your Corporate Culture
The most effective way to continuously plan for succession is to foster a culture that promotes thinking about the future as a valuable quality. Having succession planning a regular part of your corporate culture portrays commitment to the long term success of your company.
Succession Planning for Vertical Market Software Companies
When it comes to Vertical Market Software companies, Owner Operators have the added pressure of ensuring future leaders understand the specific needs of their business. In optimal circumstances, business owners may already have a strong candidate suited to the task. In other scenarios, an acquisition may be an ideal choice as the company can continue operations under the right buyer. When an acquirer is interested in keeping the business and continue scaling, it usually means that employees are well cared for and customers continue to receive the same attention and service.