You have owned or managed your company for what… 20, 30 years, maybe more? Perhaps you have even taken over for your father or another owner when they were ready for their well-earned retirement.
You have invested time, energy, imagination, money and passion to get where you are. Your company has been you and your family's livelihood, and it can continue to be for many more years. Up to now, success has been your responsibility. Now it is your turn to decide who will take over for you.
Succession planning for your company means deciding to enter into a process of transfer where the objective is to prepare and put in place the next generation of owners and managers. The new person or new team will be responsible for the future of your company.
The more time and dedication you devote to succession planning,
the more satisfying the result will be.
For example, to be well prepared for the future and to assure that you can fully appreciate what you have built over the years, consider undergoing a strategic planning exercise at the outset. This will help you be better prepared for succession.
The transfer is a process: it is not a one-time event; rather it is spread out over a longer period. The theoretical model used here is inspired by research by Pierre Hugron1 , which itself is based on American writings, and proposes two dimensions that are each divided into steps: the transfer of management and the transfer of ownership.
The goal of the transfer of management dimension is to put the next management team in place, particularly the president and chief executive officer. The purpose is to answer the following questions:
WITH WHAT QUALIFICATIONS?
UNDER WHAT CONDITIONS?
AM I READY?
The goal of the transfer of ownership dimension is to put in place the next team of owners and shareholders that 1) will assure you a fair purchase price for your company and 2) will be likely to find the financing necessary for the company's continued and future growth. The purpose is to answer the following questions:
IN WHAT WAYS?
AT WHAT PACE?
The two dimensions of the company transfer model progress more or less at the same time. The duration of each step is variable. The process is neither linear nor limited by time. Before taking action, it is strongly suggested to take some time to think, and to start thinking as soon as possible.
The process is complex, but achievable.
Turn time into your greatest ally.
A model is not a recipe. Be creative! The “made-to-measure” is a much better fit than the “ready-to-wear.”
1) Hugron, Pierre. « L'entreprise familiale. Modèle de réussite du processus successoral », Institut des recherches politiques et Presses HEC, Montréal, 1991, XVII, 155 p.