Five Ways to Make Handing Over the Reins Easier

Chief inventor: I once visited a software company that went from zero to $75 million. The founder had 12 computers in his lab, and he was the sole developer of every product. He had a group of developers to finish his products before sales sold them to distributors.

Unfortunately, the odds of a successful transition are not great. The United States Small Business Administration reports the odds of surviving a transition from the founding generation to the next are a mere 30 percent. Often, the founder is the top salesman, inventor and creative brain of the company.

It can be done, though. Here are five steps to building a successful succession plan in which the founder is satisfied, a quality replacement is found and employees and shareholders can feel good about the transition.

1. Develop a profile. You need to develop criteria that outline the type of person that would be a good successor, including, but not limited to, the following:

• years of business experience
• years of experience in the actual business
• managerial skills
• strategic skills
• sales skills
• marketing skills

2. Define the founder's role. The founder's role has to be clearly defined. That could be:

• stepping down over a period of time;
• staying on with a defined role, such as working with his or her successor on strategic planning, product development or sales; or
• staying on the board as chairman emeritus.

3. Develop a search committee. A smart founder will develop a search committee and provide the committee with a list of attributes, skills and experiences she believes is needed to take over. The search committee should be comprised of:

• founder
• one or more independent board members
• member of the senior management team
• outside search professional

The search committee should do background checks that go all the way back to confirming the candidates' college graduation.