Business Succession Planning
(Federal Government Contracting Clients Only)
Business Succession Planning
“The definition of Business Succession Planning is the processes related to identifying and developing new leaders who can replace old leaders when they leave, retire, or die. Succession planning increases experienced and capable employees’ availability to assume these key roles (usually in management) as they become available.
Why Do Business Succession Planning?
Having worked hard to build a successful business, you want to be certain that your business will not just survive but keep its vitality once you retire or cannot fulfill your responsibilities due to incapacity or death.
Establishing a solid business succession plan helps ensure that what you have built will remain in good hands regardless of what happens.
A proper business succession plan requires significant care and preparation. Overlooking even a single detail could thwart your intentions and put your business at risk. THE LEXWERX LAW FIRM has guided numerous entities through smooth transitions in ownership and management. Our team can deliver valuable legal counsel at every stage of the process, including:
- Choosing a Successor — We can help you evaluate whether your successor is qualified to steer the company, and we advise on ways to assure their familiarity with your business practices.
- Developing a Formal Training Program — Responsibilities that might seem second nature to you could present a challenge to your successor. Developing informative documents and training programs maximizes the likelihood that the next person will hit the ground running.
- Establishing a timetable — Do not blindside your successor or your employees. Giving everyone adequate time to prepare and adjust to the planned succession will ease the process for you and strengthen trust throughout the organization.
- Planning for Your Future — Whether you’re looking to retire or might be interested in a new opportunity, our firm can help you assess your preparedness for the next stage in your life.
- Execution of the Business Succession Plan — Once your business Succession plan has been established, we’ll guide you through each phase and manage the legal tasks necessary to transfer authority to your successor.
What Type of Business Succession Planning Should You Consider?
To give yourself and your business the best chance to thrive, it’s important to evaluate your options carefully before moving forward. THE LEXWERX LAW FIRM assists with all types of transition options, such as:
- Selling Business Interests — We prepare the necessary documents if you wish to sell your business interest outright in return for money or other assets.
- Buy-Sell Agreements — You can sign a legal contract in advance that sets terms for the transfer of your ownership share upon your retirement, disability, or death.
- Grantor Retained Annuity Trusts (GRATs) or Unitrusts — With an irrevocable trust, you can transfer your assets while still maintaining an income for a set amount of time.
- Private Annuities — Some choose to give up their business property in exchange for receiving regular payments over time, as ownership is transferred to a family member or another buyer.
- Self-Canceling Installment Notes — A buyer of the company can make regular payments to you, which may be canceled upon a specified contingency.
- Family-Limited Partnerships — Owners choose these arrangements to transfer the business to a partner and then gift their interests to family members over time.
THE LEXWERX LAW FIRM can help develop a customized contingency plan tailored to your situation and goals.
No matter what industry is involved, you can trust us to help you protect the future of your business.
Frequently Asked Questions
Business Succession Planning is developing talent to meet the needs of the organization now and in the future.
Every time a manager makes a work assignment, he or she is preparing someone for the
future because they are building that worker’s ability.
Work experience builds competence and different
kinds of work experience build different kinds of competence.
Replacement Planning is about finding backups to fill vacancies on an organization chart.
Business Succession Planning is about grooming the talent needed for the future.
They are related, but different.
Organizational leaders need to align their staffing and leadership needs with the organization’s future strategic objectives.
If leaders do not take action to establish an effective succession planning and management program, leaders are likely to fall victim to the so-called “like me” problem.
That is the dilemma in which people are biased to pick people like themselves, viewing them more favorably.
It is not intentional discrimination but rather human nature to see the world through our own lenses.
For that reason, men tend to prefer men; women prefer women, engineers prefer engineers, and so on.
The more ways you are like your boss, the more likely your boss will regard you favorably.
Since there is a tendency to want to clone job incumbents for successors, organizations must take steps to counteract that built-in bias for the simple reason that the job incumbent of today, while perhaps perfectly suited for the business environment now, may not be suitable for the business environment of the future.
For this reason, organizational leaders must take steps to determine how many and what competencies are needed for the future so that business succession plans can overcome the cloning bias and pick winners who can help the organization realize its strategic objectives.
- As the company leader, you need to consider the Purpose of the Program. Why do you need it? (Do NOT assume that all executives of the organization will naturally share the same objectives. They will not. Some will want some things; others will want others. But confused goals will not lead to effective results.)
- Measurable Objectives of the Program. What measurable results are desired from it over time?
- Competencies Needed for Success Now. What kind of person is needed to be a successful performer in
every department and at every organizational level?
- How Those Competencies Are Measured. How well is the organization’s performance management system measuring present competencies?
- Competencies Needed for Success in the Future. What kind of person is needed to be a successful
performer in every department and at every organizational level in the future if the organization is to realize its strategic objectives?
- How the Organization Assesses Potential. How do we know that someone can succeed in the future, the higher level of responsibility if we have never seen him or her perform it?
- Narrowing Gaps. How do we narrow gaps between the person’s present job requirements and present performance and his or her future targets or possible future levels and what he or she needs to know or do to be ready for that higher-level or more difficult responsibility?
- Evaluating Results. How do we know that our efforts to narrow gaps is working and that the succession program is achieving its mission and accomplishing its measurable objectives?
Common challenges in getting started on a business succession planning program include:
- Defining Succession Planning as an HR issue rather than a responsibility shared by the Board of Directors,
Senior Management, Managers at All Levels of the Organization, and the Individual Workers.
- Understaffing the required effort. A good succession program requires time and effort with coordination. It cannot be “completely outsourced.” Consultants can help, but they cannot “do it for you.” Managers
cannot abdicate responsibility.
- Establishing Overly Ambitious Goals. If the organization’s leaders do not focus on the succession
effort on specific and measurable objectives to be achieved, the business succession planning program will lack goal clarity — and resources will be wasted in pursuing many confusing, overlapping, and perhaps conflicting goals. You
have to be clear about what you want before a program can be established to accomplish it.
- Failing to Hold People Accountable. This is perhaps the biggest problem facing all succession programs.
What happens if an individual does not meet this year’s Individual Development Plans? What happens if a senior executive in charge of a division does not meet measurable talent-development objectives for their division?
These questions center on accountability.
Different organizations solve the problem in different ways, depending on corporate culture.
The real question is: How do we arrange consequences for building talent or failing to build talent?
How does talent development stack up against meeting the numbers for this week, month, quarter, or year, and what do we do if we are making profits or sales but not grooming people for the future?
If a business has established an effective business succession planning program, organizational leaders should expect that:
- It will take less time and expense to source talent to fill vacancies because the talent has already been
identified and prepared.
- People’s development efforts have been aligned with the organization’s strategic objectives.
- The right people will be available at the right times and in the right places to meet the right objectives.
- The organization is prepared to deal with sudden, catastrophic losses of key people.
The Board’s role is to ensure that an effective business succession planning program exists and is actually working effectively.
The CEO is responsible for ensuring that the program’s effective business succession planning and management exists and works effectively.
Senior managers are like the co-pilot of the airplane. Each is responsible for establishing talent development objectives for their own division or department and then meeting those objectives without fail.
The HR department supports the effort by arranging for the policies, procedures, technology, and other support to help ensure that the “ship goes in the right direction.”
Think of the VP of HR role as akin to the 2nd mate of the ship.
He or she advises the captain where and how to steer and provides on-the-spot advice about dealing with unique problems, situations, or challenges.
Department managers are responsible for attracting, identifying, developing, and retaining talent for their respective departments.
Managers should realize that they are responsible — and accountable — for both “making their numbers” and preparing talent to meet the organization’s future needs.
Individuals are responsible for knowing what they want out of life, their careers, and the organization.
They are also responsible for developing themselves for the future.
While there is nothing wrong with individuals “wanting to stay where they are” — particularly if that stems from a work/life balance decision — individuals have a responsibility to inform people to know what their objectives are so long as it does not hurt their own interests and possible future employability.
Succession planning is about identifying individuals seen as having high potential or high motivation early in their
career or tenure at your business.
At this time in their career, these employees may be in a position covered by one of the collective bargaining agreements within our system, such as IFO, MSCF, MSUAASF, MAPE, AFSCME, MNA, MGEC, MMA, etc.
It is helpful to remember that we do not promise the next open position to any one particular employee when we’re doing business succession planning work.
Business Succession Planning is about identifying and developing multiple candidates to have a pool of qualified candidates who may be ready to apply for any open position when it becomes available.
It helps communicate the succession planning program and the expected outcomes so that all stakeholders are aware that management is working towards a fair and equitable talent planning process that is being undertaken to meet the long-term needs of the business.
With THE LEXWERX LAW FIRM, LLC, clients are billed monthly based on your selected fee plan: Hourly, Monthly Fee Plan, General Counsel for a Day Plan, or Project Specific Flat Rate Plan.
The prices listed do not include applicable taxes and expenses paid on your behalf.
However, we are committed to providing affordable and transparent legal services, so we do not charge for the following:
- Photocopying, Printing, and Scanning (* Non-normal quantities or Client requested duplicates may incur a fee)
- Travel within the Greater Tampa Bay area
- Long-distance telephone calls
Once you have assigned us a legal task, THE LEXWERX LAW FIRM, LLC will give you an estimate of the required hours for completion and continually communicate project status and any change in scope and estimated cost to allow you to understand and budget for your legal spend.
You know beforehand what your expenses will be.
We will invoice you no less than monthly on the first of each month. If we need to make adjustments in your monthly retainer, we will reach out and have a chat.
Businesses without in-house legal counsel often hesitate to seek help from traditional law firms due to their services’ high and unpredictable costs.
As a law firm with significant in-house legal counsel experience and an entrepreneurial spirit, our Outsourced General Counsel understands how timely and strategic legal advice can help you make the right business decisions.
Our “Customized to You” Monthly Fee Plans allow you to retain experienced legal counsel on a monthly budget without the cost of full-time in-house legal counsel.
It is 100% Your Choice!
- You can choose to roll-over your balance to the next month or
- We will refund the balance and review if we should adjust your next month’s bill to a lower amount.
Prospective Clients of THE LEXWERX LAW FIRM, LLC can call and schedule a 30-minute or 60-minute Initial Consultation.
We prefer to come to your business place to meet with you and get a feel for your business. Alternatively, we can meet virtually or at our offices in Tampa.
We like to get an opportunity to understand your business during this initial consultation better, explain our practical approach to legal services, and determine how we can support your company.
Just click on the “Request an Initial Consultation” button on this page to contact us and schedule a date and time to chat that works best for you.
Choosing the right Succession Planning Counsel can help ensure the health of your business.
THE LEXWERX LAW FIRM, LLC, of Tampa, Florida, will guide you through why we are the right choice to guide you through your Business Succession Planning. In fact, we provide custom solutions based on your specific needs and corporate dynamics. We serve the greater Tampa/St. Petersburg, Florida area.
To schedule a 30-minute or 60-minute Initial Consultation, call us at 813-519-4339.