The Digital Business Start-Up Workbook: The Ultimate Step-by-Step Guide to Succeeding Online from Start-up to Exit

Reducing Owner Dependency

Succession planning is a crucial consideration when selling or retiring from a business and is critical to a company’s future success and long-term security. It enables companies to reduce owner dependency, identify and develop potential successors and optimize independent value.

Businesses that are wholly dependent on the activities and performance of their owners are unlikely to attract a significant capital value on a sale. At the point of sale, the business should be able to run without the involvement of the owner, except where the owner is performing a line management role that can be filled through normal recruitment. Without a succession plan, shareholder value and credibility in capital markets can be dramatically ...