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Paul R. Ferreira is an Attorney & CPA whose practice covers Federal Government Contracting (GovCon), Outsourced General Counsel, Business Succession Planning, Estate Planning, Asset Protection, and Probate. Paul is also an officer in the United States Army Reserves.

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9 Important Succession Plan Steps

Business Succession Plan: Are you fully prepared for the inevitable things in life?

Few of us wake up in the morning thinking about the reality that each day that passes brings up closer to the day that someone else will one day be in charge of our business.

Retirement and mortality are not things most of us want to have to face. But if we want our business to do the most it can to help us, our family, or other beneficiaries, benefit from our retirement or passing, we have to deal with this eventuality.

In this light, I have written below this article, “9 Important Succession Plan Steps”.

Table of Contents

Create a Written Exit Strategy

Do you want to know one of the secrets of successful entrepreneurs? 

Successful Entrepreneurs often had started thinking about their Business Succession Plan when they first started their business.

They may have made plans to build the company to a certain revenue level. Then they planned to “flip” the business to a larger company.

Some may have started the business with plans to “pass it on” to a son or daughter.

Regardless, some business owners put a “written plan” in place early. If you didn’t, that’s OK! You reading this article now means that you are ready to take the steps needed to Plan and Execute a Business Succession Plan.

The rest of this article will detail what your “Written Business Succession Plan” should contain. The key point of this section is that you “write down the plan”!

Build a Solid Team and Processes Foundation

When we start our businesses, we are often a “Team of One.” That works fine at the start, but we have to build a team and business processes to make our company “scalable” over time. 

But, most of you reading this still likely have too many business processes depending on “You”! You likely approve major business contracts, approve payroll each pay cycle, meet with large clients, and more.

If you are going to have a successful Business Succession Plan, you have to step back and put a solid team in place. Don’t have a CFO or VP of Finance – start the plan to hire one. Are you acting as VP of Sales? It is time to hire a VP of Sales. Don’t have a CTO, start the plan and hire one.

Remember, you want your business to survive and prosper when you’re not there to make things happen, and it takes a solid team to be in place.

You must review and add to your business processes so that even “major” items you approve now get done “the right way” without your involvement. I suspect if you are honest with yourself, the other C-Level job functions that you are “hanging onto” you are doing so because you like the job function. Put those business processes in place so the person you find to fill that role “does the job like you would” – more or less.

In reality, when you hire “your replacement,” there’s a better-than-even-money likelihood that they may do the job better than you. In my book that’s a solid win!

Set Clear Goals and Milestones Dates

Earlier I spoke about taking the first step of creating a Written Exit Strategy. 

I would go further.  It would help if you made a written plan that includes timelines for each line item and each party involved in each program step. By doing so, you will be able to track your progress to your goal – a Successful Business Succession!

The act of creating this Business Succession Plan Checklist will force you to think about those people inside and outside of your company which you will need to assist you. You will have to look at your schedule and allocate time to have those conversations. Each person involved will have to get back to you on a date when they can deliver their “help.” 

Be sure to identify clear goals for both yourself and your “helpers.” For each goal that is more than 1-2 weeks in length, set email reminders to “tickle” each helper on their responsibility to their part of the Business Succession Plan. 

I would suggest you make the Business Succession Plan a monthly discussion item with your C-Level team. You will find that your management team wants confidence in how the company will continue when you are no longer there to run it. Fear of an unknown or unclear future can cause you to lose your top talent, at and below the C-Level. 

Identify Crucial Corporate Roles

I spoke earlier about letting go of the C-Level roles you may be handling in addition to your role as CEO. You also need to identify any C-Level / VP roles you may have never filled.

Many SMB’s go without a CFO or VP of Finance for many years. They often depend on an exceptional bookkeeper and maybe their banker or financial consultant. While this may work while you are still working, it will not help your company once you are gone. At a minimum, hire a part-time CFO. You can find a great one to fit most any budget, and frankly, you really should already have one. 

The same is true for missing a General Counsel on your team. If you don’t have one, start with an Outsourced General Counsel on retainer (part-time). Often you will find in the first month they have more than paid for themselves. (I provide services as an Outsourced General Counsel).

One can tell a similar story for VP of Sales, Chief Technical Officers (for Technology focussed firms), VP of Marketing, and so on. 

The bottom line is that you need to fill out your management team. You also need to assess your management team. If you have a person in a role that is not up to the job, now is the time to replace them. Remember, you are working to build a solid future management team that will be successful without you!

Create Skills List for Each Key Role

Many people you hired may not have had a job description with critical skills required for their role. That’s perfectly normal!

However, now is the time to create a list of critical skills “for every role” in your company! Creating this skills list is so easy too. Every person in the company makes a list of what they consider to be the essential skills they possess to do their jobs. For bonus points, you ask each to add a list of new skills they think they need to add to perform at an even higher level. 

The staff that included the “future skills” they need are your “go-getters.” These staffers generally like what they do, but they know that they need to add to their skill set to grow. If you help them achieve that growth, they are more likely to stay long-term. If you don’t, then they may be some of the first to exit.

When you get every employee’s key role skill setlists, compare them to online job listings. You will find that some of your staff left many things off their list that other companies see as a critical skill for their role. Ask yourself why? Then ask them why? They may feel boxed in by doing lower-level tasks that a lower-lever staffer should handle or don’t have or don’t allow to do the job. Get to the bottom of this so you can resolve if you have a poor fit at any role level.

You will be amazed how much more confidence you have in your team once you have your final Key Skill List for every role in your company and the right person in every position.

Train your Successor(s)

As a business owner, you are likely holding onto roles other than President and CEO. The owner wearing multiple hats is very common. Serving in numerous executive roles is often the most limiting factor to the business’s sale or its successful continuance if you suddenly no longer be there.

It also can be a limitation in hiring other top management team members. Strong management teams want a clear leader in every role. Other leaders don’t want a CEO/President who is also VP of Sales, COO, VP of Finance, etcetera. When they’re having a business discussion, to whom are they speaking?

For a successful Business Succession Plan to work, you have to train your successors. I used plural successors here because you may be holding multiple roles. If you have successfully built your business, you want to make sure the people who run it after you are gone continue to grow the business. Allocate time to train your replacement for each role you have held.

Forms of Training

Training can come in many forms. Handing out top books in the appropriate fields to each person is a good start. Engaging corporate trainers should also be on your list. Local college courses have their place. 

But don’t forget your inside skilled team members. Ask them to hold classes or a talk on a specific subject. Allocate the time for them to prepare written and visual materials. Most of the time, you will find they are excited to teach their coworkers.

A well-cross-trained staff makes for a stronger and more happy company.  Employees know that others can step in and cover their responsibilities when they need to be away.

But remember, as you are likely hiring experienced VP-Level and above, you need to “listen to them” too! Some of your business processes will probably need to change to incorporate “their way” of doing their job. Remember, there is often more than one way to accomplish every task. You have to be open to the practices of those you hire.

Implement Key Post-Exit Metrics

Any engineer will tell you that no plan is worth anything unless you measure the steps that lead to the result.

Part of putting together your Business Succession Plan is making sure that it is working. Measuring if your plan is working may mean that you need to “step back” on the day-to-day operations and let your team “do its job.”

Depending on your exit time frame, you may only want to come into the office once a weekly staff meeting. In the staff meeting, your job is to “sit and listen.” You should not interact. Remember, your goal at this phase is to confirm that you have the right management team members in place and the business processes are in play. 

You see this exact process happen in the top 100 companies. The leader will give up the President role and only retain the CEO role. The president to run the day-to-day business processes. The CEO measures the President against a set of agreed-to metrics. If the President meets or exceeds those metrics, then the CEO usually gives up the CEO role also becomes the Chairman of the BoD. They may even step aside entirely. 

When the Business Succession Plan involved the business’s sale to another company, there is often a transition period, referred to as an “Earn-Out” period. An “Earn-Out'” period is to help ensure that the acquiring company is “getting what they paid for.” 

Inform Team on Your Future Plans

There is little that can be kept secret for long in any company. Once you begin this process of creating your Business Succession Plan (Exit Strategy), rumors will abound. 

In the early days or weeks, while you are roughing out the plan’s basics and establishing timelines and responsibilities, you can keep the Business Succession Plan’s details within your upper management team. However, once the schedule is ready, all team members have a role in the Business Succession Plan, so an “all-hands” meeting is appropriate. 

Adequately explained, creating a Business Succession Plan will bring a sense of confidence in both the company and its management team. Employees hate uncertainty. Employees who know the long-range plans of the company can gain confidence in their long-term employment. 

Look to the Future, Not Just the Now

You may have gotten to the point in this article and maybe saying to yourself, “I love this content, but I’m 10+ years away from needing a Business Succession Plan.”

Well, I have to disagree respectfully. 

None of us knows what the future will hold. We could:

  • Not wake up tomorrow. 
  • Wake up in a hospital bed.
  • Have a spouse or family member that needs our full-time help for weeks or months

If any of these three common things happen, we would, at a minimum, be mentally torn between our business needs and our family needs. The stress would be untenable!

By implementing these “9 Important Succession Plan Steps”, your focus can be 100% on dealing with the family emergency and zero percent on your business when any of these or other situations arise. 

Relax and Enjoy!

Congratulations to those of you who have completed my “9 Important Succession Plan Steps” and are now enjoying the post “I’ve got to go to the Office” life. It feels pretty good, doesn’t it!

I know that it hasn’t been easy or won’t be easy if you are just now starting. Giving up control is difficult for most leaders. I can promise you that most of you will feel a strong sense of accomplishment by putting your Business Succession Plan in place and starting the journey to completing the plan.

Best of all, your business will be much stronger having created and begun the Business Succession Plan process.

Plus, your family will know that their future is more assured should something befall you. 


As an experienced Business Succession Planning Attorney, I am here to assist you.

To read more about how I can help, Click Here, or select Business Succession Planning under the Practices Areas in the navigation bar on my website.

I further hope you find this article helpful in your decision-making and encourage you to reach out to me with any questions you might have. Please call me at my office or tap the Appointment icon at the top of the page to schedule an appointment.

With Best Regards,

Paul R. Ferreira, JD CPA CFE
Owner/Founder at The Lexwerx Law Firm, LLC
1550 W. Cleveland St., Suite 8
Tampa, Florida, 33606
Appointments: www.Lexwerx.com/Calendar/

** Information contained herein is not to be considered as legal advice. Please consult your attorney for legal advice on this or any legal matter.

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