The Succession Plan – What’s Involved? (Topic 4 of 4)

Puzzle with piece missing

This is the fourth and final topic in this short series covering the problems I see owners have when trying to prepare their business for exit.

There are many steps that can be involved in a succession plan and it will vary depending on the business’s needs. Let’s look at 3 areas in detail: Evaluate, Process, and Legal.


I always start by identifying the owner’s desires and needs.

What do you, as the owner, want to get out of this process? Do you want to sell the business ASAP, or are you looking for a gradual transition to another person inside your business? Check out Topic 3 of 4 for some more details on this.

Identifying the Assets

What is it that can be sold? As mentioned in the first topic in this series “If you are the product you cannot sell ‘you’”. So, don’t even think that you can sell your slides, talking notes, and IP if you are the delivery asset of these products. This will not be immediately valuable to the next owner because they will need to learn to be the delivery asset. A buyer wants something they can make money on, right away. What can they make money on?

  • A business structure that can be sold and owned by another. For instance, if you own a sole proprietorship, you will need to define a clear distinction between what is yours and what belongs to the business; because, in the eyes of the CRA, you are the business and it cannot be sold. A business structure, like a corporation has value. The longer it has been in business, the more valuable it may be, having its own credit and tax history.

  • A brand that is well developed, known, not in a trademark conflict, and can be owned by another. For instance, your personal name cannot be easily sold and transferred, especially if your business is a sole-proprietorship. If you are selling the name of your product or service, ensure that you own the rights to that brand name.

  • Tangible assets, like: inventory, furniture, a good lease, online courses, workbooks, patents, registered trademarks, property, office supplies, equipment, insurance, future or ongoing sales contracts, software, etc. These all have some type of easily definable value.

  • Intangible assets: For instance, a proprietary process,  ‘good will’ (with your workers, clients, suppliers, landlord, etc), great working conditions, happy employees, a great location, a valuable market niche, a trending service, etc. It is harder to define the value of intangible assets, but if you find the right person, it may be exactly what they are looking for and more valuable to their vision of the future business.

It helps if you spend some time in the ‘buyers shoes’ and think about what you would want, as a buyer, if you were going to go into negotiations. Maybe ask around to find out what other people think is valuable in your and what is not. That may be very different than what you think your offerings are worth.

Roles and responsibilities

I use an assessment tool to look at all areas of the business to see how the owner is controlling different aspects and what it would take to separate them from the ‘doing’ in the business. If you don’t have access to this type of assessment, I would suggest simply listing all you do in these different areas of your business: Management, HR, operations, service delivery, sales, marketing, and product development. You will likely find that you hold many hats in your business, and under each you have many roles and responsibilities. Make the list as comprehensive and complete as you can. When you break it down into tasks required, you may find that you have hundreds of tasks that you are responsible for, depending on the size of your business. The smaller the business the larger this list will be.


The process of succession is really three parts:

  1. What you are now

  2. What you are changing

  3. What you will become

The challenge with this is it is not a linear and synchronous process. Implementation of your changes require an understanding of what you are not changing, what must change, and how you will do this. Start with a plan.

  • Having a detailed plan helps keep you on track.

  • Having a way to recognize, pivot, and manage challenges & issues ensures obstacles in your plan will not cause you to miss your targets or miss opportunities. No plan should ever be ‘written in stone’.

  • Get your team on-board. Change does not work well if you have some people working against you.

  • Hold regular meetings to check in with your and your people’s progress.

  • Celebrate small wins. Every successful change you are able to complete within the plan, will make the next steps easier. If people see how valuable every success is, they are more likely to continue the change, and not revert back to old ways.

  • Recognize that your people may be grieving the way it was. Give people time to fully make the change. They will be more effective in the new process once they are fully past thinking about the old days.


First, I am not a lawyer nor an accountant. I recommend you start by retaining a good business lawyer and accountant, if you don’t already have one. The lawyer should be familiar with business structures, business sales offers & agreements for your legal jurisdiction. Some items may vary between province. Your accountant should have knowledge around different ways to complete a business valuation and be familiar with the process of the sale of a business and how it will affect your books.

Your business may be governed by other regulatory bodies. The sale of your business may have additional constraints. Your accountant and lawyer should be familiar with your industry so they can give you valuable and correct advice.

Your business financials must be correct. Have your documents available so the next owner can easily complete their due diligence.

Other contracts and sales agreements may have contingencies and constraints that may not be transferable to a new owners. Look over all your contracts to ensure you actually have something that can be sold with the business.

Why is this important?

Because you don’t want to get to the end of the process and realize key assets and processes are missing. It’s not easy to sell a puzzle with a piece missing, and if you could, you are going to get a lot less money for it. Complete the ‘puzzle’ so you have all the pieces that add to the value of a successful transition.

The Series – 4 Topics

Read the first 3 articles of this series. Links below.

  1. Your Business Does Not Run Without You (Part 1 Article Here)
  2. Value to the Next Owner (Part 2 Article Here)
  3. No Team – No Vacation (Part 3 Article Here)
  4. The Succession Plan – What’s Involved? (Today’s topic)

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The articles you read in this blog are 100% created by Barb Stuhlemmer, not by AI.

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