Before the actual sales process begins, thorough succession planning is required. Especially when a succession solution is being sought, this is a success factor. Only if detailed and intensive work is done here will the subsequent sales process be successful. Succession planning should be one of the most important milestones of any mandate.
In the context of succession planning, a few main activities should be mentioned here. These have proven successful in practice. Many activities seem self-evident. This is because in many cases planning is not approached with the necessary level of detail.
Succession planning activities are therefore:
- Development and formulation of one’s own vision
- Analysis of own skills in a personal profile
- Requirements for the potential transferees
- Determining the process and roles within the follow-up project
Working through these points results in a well thought-out and structured succession plan.
The vision as part of succession planning
Usually, most companies have a mission statement. This exists in a wide variety of forms. The company vision must be questioned during the planning process. In addition, the transferor’s own personal vision must be worked out. This can relate to his own company. His lifetime after the handover plays a major role. If the transferor can formulate his vision and also put it down in writing, much has already been gained.
- Vision of the company (Where does the company want to go? What does it want to achieve?)
- Vision of the entrepreneur in relation to his company (Where does he see his company after the handover?)
- Vision of the entrepreneur in relation to his time after the handover (What does he still want to achieve? How does he want to use his time meaningfully?)
One’s own abilities
Knowing one’s own abilities (and weaknesses) helps the entrepreneur enormously. In this way he learns to assess his behaviour and can therefore prepare advantageous discussion and negotiation situations. After all, every transferor wants to hand over his life’s work with a good feeling. If there is an overestimation of oneself or even an underestimation of one’s own abilities, this will lead to losses. The losses can be both emotional and monetary.
Requirements for the transferee
The search for a buyer should not become a search for a needle in a haystack. This requires a precise analysis of potential buyers. Therefore, a detailed elaboration of profile parameters is indispensable. It has proven to be a good idea to draw up a broad catalogue of criteria for a takeover candidate during the succession planning process. This means that both the positive and the negative criteria for a takeover are worked out.
The project plan
Finally, all succession planning considerations culminate in a clearly structured project plan. The plan provides information about the required time frame. As a result, it becomes clear from when to when which milestone must be worked through. Finally, the project roles are defined and assigned concrete tasks.
If the succession planning is within the framework of these few points, the process is also easier to handle for a buyer. After all, good preparation ultimately increases the chance of a successful handover and securing the life’s work.
Tips for further reading:
Business sale vs. real estate sale
Advice traps in the process of business succession
The costs of a business succession or an M&A project
Company succession: Why a pure success fee makes serious advice difficult
Is Fielmann’s succession plan in the family business exemplary?
The 5 most important contents of an entrepreneurial emergency kit
There are a few core activities to mention here. Some steps seem self-evident. However, often the work is not detailed enough.
- Development and formulation of one’s own vision
- Creation of a personal profile with analysis of one’s own abilities
- Requirements for the potential transferees
- Determining the process and roles within the follow-up project
By working through these essential points, one obtains a structured succession plan.
Most companies have a mission statement. This corporate vision must be questioned during the planning process.
In addition, it is important to work out the personal vision of the transferor. This may relate to his own company. However, his lifetime after the handover is much more decisive. The most important thing is that the vision is recorded. In short:
- Vision of the company (Where does the company want to go? What does it want to achieve?)
- Vision of the entrepreneur in relation to his company (Where does he see his company after the handover?)
- Vision of the entrepreneur in relation to his time after the handover (What does he still want to achieve? How does he want to use his time meaningfully?)
