Succession planning is one of those things that most business owners know they need to do at some point and yet it is often delayed, ignored or not addressed at all. Why? In many cases, what gets in the way is the number of “unknowns” when we start the planning process and the lack of a good framework for putting a plan together.

Succession planning can be like an equation with too many variables. For instance, people will often tell me they could set a better timetable if they know what the company would make over the next few years. Others want to keep working until they don’t feel they like or are up to it anymore. Some would love to know if their kids will have an interest in someday owning the business, but often times they are not ready for that decision (especially if they are still 7 and 9). Others have suggested it to their “leadership team” but don’t know who among them would be a real candidate.

To me, the key is putting together a framework and identifying the relevant questions. Then, putting the answers to those questions in four categories: (1) the things we know, (2) the things we need to research, (3) the things we will need to negotiate, (4) the things we just won’t know until some future point in time.

I use a Transition Planning Framework that I developed years ago to frame the questions and start gathering the answers and categorizing them. Getting clear on the things we know can help prioritize the things we need to research. Along the way, that research could include consultation with an attorney, accountant and/or financial planner.

Once we have a model and more answers in the “known” column, the next issue is determined by whether we have a successor, a group of possible successors or we need to find one. If we have one, we can start talking about more of the details of a transition. If we have a group of potential successors,  we need to develop a methodology for them to “raise their hand” and a means to determine how a successor will be chosen. If we do not have either, we need to put together a plan to hire someone who could be a potential successor or think about putting the business out on the open market.

This process continues with more and more of the unknowns either being researched and decided or negotiated.

The process can take some time and there can be some false starts. However, neither the unknowns nor the false starts justify just not putting together a succession plan. In many cases, the process, the research, identifying a successor and putting the whole thing together can take time to do correctly. Succession planning makes me thing of the Chinese proverb, “The best time to plant a tree was 20 years ago. The second best time is today”.