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Planning for succession: 3 things you should do

You've worked hard to create a business, and now you're ready to create a succession plan. You want your children, grandchildren and great-grandchildren to benefit from the empire you've built over time.

Since you're ready to create a succession plan, it's a good idea to know more about what the plan is and what it does. Family businesses make up around 50 percent of the total gross domestic products of the United States, so keeping yours productive is the goal. What can you do to make sure your business continues to function even if you have to step down?

1. Prepare for transitions now

It's better to prepare for generational transitions well before they need to happen. That means training your successor or successors in the business before they take over. This can help smooth the transition when you decide to make it. With only a third of businesses successfully transitioning to the next generation, this part of your plan is highly important.

Remember to establish a timeline for the transition. The last thing you want is to have the transition drag out so long that it makes your business unstable.

2. Create a decision-making process

As times change, the goals of your company may as well. When transitions occur, new family members may have different ideas of what direction the company should take. Instead of allowing disputes to take place, set up a decision-making process now. Use the method frequently and document your succession plan in writing. Additionally, make sure you make your wishes known to your family and stakeholders.

3. Establish and review the company's goals

It's a good idea to talk to your successors about your company's goals. Coming to an agreement on it now can smooth your transition of power later and help keep the company moving in the right direction. Identify goals for managing the company ahead of time, so your successor already knows what is expected of him or her.

These are three things to do when you're creating a succession plan. With a solid plan in place, you can enjoy peace of mind as you anticipate a successful transition.

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