Does Your Business Have a Succession Plan?
More than half of practicing interior designers are over the age of 50. About a third have crossed the threshold of 60. If you’re one of them, you may have begun thinking about when you want to retire or sell your business. Even if retirement is some time off or you intend to continue working for as long as you can, it’s a good idea to have a contingency plan in place in the event something happens that would prevent you from operating your business.
Succession planning is especially important if you are a sole practitioner or the principal designer in a small firm. Most likely there is not someone else with the knowledge, experience and training to take over running the business in your absence. Consider as well that you are firm’s brand and chief representative. Will clients feel comfortable doing business with your firm if that means working with someone else? Perhaps your plan is to sell your business when you are ready to retire. Do you know what your firm would be worth without you?
While you can’t know what your circumstances or the market for design services will be some years from now, you can begin to lay the foundation for a successful transition. Talk with family, friends and colleagues about your plans. Take some time to identify likely prospects, either for a successor or purchaser of your business. Train and develop staff to broaden their experience and grow their skills. Encourage those who show an interest in learning more about all aspects of the business. Give them opportunities to take on new responsibilities. Work with a financial advisor to determine your retirement goals and a strategy to achieve them. If you are planning to sell your business in the next two or three years, consult your attorney, accountant and tax advisor, and ask for recommendations for a reputable professional to valuate your business.
Succession planning should be an integral part of your business’ strategic plan. And like all strategic plans, it should be reviewed and updated regularly as circumstances change. Think of it as another form of insurance for your business.
