Succession planning involves recruiting and developing individuals to fill key roles within companies as employees leave an organization, and that includes your own successor when the time comes for you to retire. Here’s what you need to know about succession planning and finding the right person or people to carry on your legacy.
Planning a Successor for a Privately-Held Dealership
In a privately-held dealership, your goal will most likely be passing your legacy on to a family member – usually one of your children, or perhaps a niece, nephew, or even grandchild. Though this would certainly be ideal in almost every case, it is not always a feasible option. You may not have children, or your children may have no interest in owning an auto dealership once you retire.
In this case, you may have other options aside from keeping the dealership in your family. Perhaps you have a lifelong friend who has helped you manage and run your business for many years, or maybe one of your employees who has been with you through thick and thin understands the ins and outs and is willing to take on the responsibility. In either case, it can be incredibly gratifying, particularly if the person or people you choose share your passion and your business values. Another option available to you involves selling your dealership to a third party and investing the funds you receive to help carry on your family legacy for many years to come.
What Succession Planning in the Auto Sales Industry Should Entail
When you’ve narrowed down your choices for your successor, the next step involves making certain that the transfer of ownership flows smoothly. Ultimately, the factors you should consider will vary depending on the successor you choose.
- When transferring ownership to a family member or friend, the most important consideration involves making certain that person has the ability and drive to continue running your dealership. Be honest with yourself and never choose a successor who does not share your vision just to keep your company in the family. Make sure that you have accounted for any possible problems that might arise, such as a lack of training. Finally, if the person you choose meets these criteria, it is critical to involve an attorney right away to start drawing up formal plans.
- If you will transfer your business through a sale to a third party, the considerations are a bit different. The dealer you choose to take over your business should share your values, first and foremost. Next, consider whether the value of the sale – in other words, the amount of money you will receive for your dealership – is enough to carry on your lifestyle through retirement, invest for your family’s future, or fulfill any other goals you might have. Finally, just as you would with a friend or family member, start the process early on. As soon as you’ve decided you will sell, start making your company “ready” for the sale, even if you haven’t chosen a buyer.
Deciding who will take over your auto dealership when it is time for you to retire might seem like a stressful endeavor, but with the right information – and with the ability to think critically, even when it comes to friends and family – there is little doubt that you will make the decision that is best for you and your family.