Merger & Acquisition Insights

3 Questions That Can Kick Start Your Succession Planning

Posted on February 21, 2020 by Spencer Tenney

So many transportation business owners know they need to start succession planning…they just don’t know where to begin. The following questions can get you in the game.

• What is this thing worth?

Understanding the value of a business helps a business owner address a few major foundational succession planning issues. It helps quantify the role the transaction can play in the owner’s retirement and charitable giving goals. It defines the gap between where the business is today and where the owner would like for it to be. Finally, it helps an owner understand if he or a successor is better equipped to confront the risks required to close that gap.

• Who might be a potential successor for my business?

What got you here is not likely what the business needs to go to the next level. By defining what the business needs most to meet the future challenges in the transportation industry, you can begin developing a profile for the best “next” leader. Possibilities could include a son, a daughter, a management team member, or someone who is not currently involved in your business.

• What can I do to help equip that person to be ready?

Giving potential successors a taste of ownership is critical in helping them understand if they are fit for the weight that comes with the ultimate responsibility. Create your own pressure cooker to see how a candidate would respond in “real life” ownership situations. This provide practical training tools and should reduce your pool of potential candidates. Additionally, Tenney Group believes it is critical to share information about the value of the business as an equipping tool. It is not reasonable to expect a successor to commit their prime earning years to a business without knowing what it is worth or how to enhance it’s value. So, educate them.

Asking yourself these three questions is the cheapest and fastest way to get your succession planning on the right track. Get in the game!

Tags: Succession Planning

Category: Articles