What is your business exit plan? Selling to a big bidder? Passing along your business to family members? A plan to sell to minority partners or employees? No matter what your plans may be, the first thing you must do is plan.

Unfortunately, as we shared recently, only 40 percent of small business owners have an exit strategy for their businesses in the event of their disability, retirement, or death. Whether through private shares transferred to a senior manager, or a leadership transfer to family members, or some form of employee ownership plan, a succession plan smoothes the way for continued business success.

Where to start?

In the coming weeks, SmallBusiness.com will be exploring all aspects of business succession. A good place to start is with SCORE’s five steps in succession planning. Here’s an abbreviated version:

1 |  Choose Your Successor

It’s difficult to choose a successor for your own job. And, you don’t wake up one morning knowing that a particular manager or family member will be suited to picking up where you leave off.  If you have difficulty narrowing the field, you may want to seek the advice of your board of directors or that of a search committee you assemble to help you select a successor.

2 | Develop a Formal Training Plan for Your Successor

Identify the critical functions of the company. Have your successor work in each of these areas.

3 |  Establish a Timetable

Set up a training timetable and a timetable for shifting control of the company. If succession is to be successful, you, your successor and your management team need to know who is in charge of what and when.

4 | Prepare Yourself for What’s Next

It’s also important to outline a plan for your transition from officer and operations manager for the company. Begin your retirement plan early. As your successor takes on more and more responsibilities, spend time planning how you will continue to be energized and involved in other activities away from the business.

5 | Install Your Successor

You owe it to your company’s future and to yourself to install your successor in your lifetime. You can lay the groundwork, provide the training and establish a culture for your company. From there, the senior management and board of directors are both the support system and checks and balances for the company.

VIA | SCORE.org

NOTE | As we always note on issues of legal and financial importance, it is critical that you consult your legal, financial and other trusted advisors on issues like this. All situations are unique.

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