When is the best time to plant a tree?
“The best time to plant a tree was 20 years ago. The second best time is now.”
I’ve got to hand it to you, Chinese Proverb! You nailed it!
But what about succession planning?
When is the best time to plant that seed?
Honestly, the best time to start is 3-5 years before a business owner is ready to sell. However, I have met a lot of business owners who perpetually remain ‘3-5 years away from selling’. In those cases, the only time to start is now…
or it will never happen.
It’s easy to fall into the pattern of belief that there is still time to ‘worry about that later.’I have seen businesses that waited too long to start succession planning and due to unforeseen circumstances they had to make rushed decisions because of one of the “Dreaded D’s”: Death, Disease, or Divorce.
No matter why succession planning is done in a hurry, the end result is typically the same: the company sells for far less than it could be worth and it suffers culturally and financially in the aftermath of a poor leadership transition.
At a recent Succession Planning Roundtable presentation, Jed Dunn, partner with the Newport Board Group recently put it like this, “ Throwing a succession plan together at the last minute is like putting your football team together a week before the Super Bowl.”
Trust me, no one in their right mind is going to bet on that team.The opportunity cost of starting succession planning now far outweighs the cost of starting succession planning later. As H. Jackson Brown Jr. eloquently reminds us, “nothing is more expensive than a missed opportunity.”
By planting your company’s succession seed now… it will have time to grow. Its roots can start digging in so you can start branching out. Ensuring that you have a mature plan when the time comes to sell or pass on the reigns leaves you with two great options:
Sell the tree at a premium for it top quality wood, or sit in its shade and enjoy its fruit.The choice is yours.
Who will you recruit to be on your team now so you can win the super bowl of your business later?