This article is reprinted by permission from NextAvenue.org. Succession planning for business owners isn’t just for the ultrarich and powerful like the Roy family battling it out on HBO’s “Succession.” Having a plan in place for who’ll take over when the founder exits is essential for all entrepreneurs.
Yet, 30% of business owners don’t have a formal business succession plan, according to the Northern Trust Institute’s Business Owner Benchmark Survey. Worse, of those owners who do have succession plans, 50% have major concerns about their successor’s ability to maintain the success of the business.Ask an expert With this in mind, Next Avenue spoke with Eric Becker, 60, co-founder and co-chairman (with Avy Stein) of Cresset Capital Management, a Chicago-based firm specializing in advising entrepreneurs, CEO founders and their families. Following are highlights of the conversation, with Becker’s advice on how and why you should create a succession plan for your business: Next Avenue: Why do so many business owners lack succession plans? And why are the ones who do so worried about them? Eric Becker: There are multiple reasons, and I would say, in my experience, that 30% number might even be understated. In some ways, it’s a little bit like other areas of life that require planning. People don’t always want to go there. For example, having a will and doing personal estate planning — a lot of times, people kick that can down the road. That’s because we don’t want to confront these realities. Another reason: Small businesses are, many times, resource constrained. But there are resources available to help people get this kind of work done. And it’s very, very important. I wonder if some of it is also about ego — that the business owner may say, ‘Nobody can run this business the way I do, so what’s the point of trying to have a succes …