Succession planning: the right time to start

Business owners are pragmatic. Most of them know perfectly well that succession is coming, and yet most start too late. So the honest answer to the question of timing is this: earlier than it feels necessary, and as a rule of thumb, three years before the handover you have in mind. Because as long as the day to day presses and the succession waits, the day to day wins every time, until some outside event forces the decision.

The illusion of 'not yet'

Succession rarely feels urgent. The business runs, customers are happy, and the handover sits somewhere in a future that keeps sliding back another year. This is not negligence, it is human: what causes no pain today loses out to what sends an invoice today.

The problem is not the postponing itself, but what it sets in motion. Whoever does not begin of their own accord begins under pressure, and the pressure comes from outside: a health diagnosis, an unexpected offer on the table, a market that turns faster than the business model. Planning under pressure is poor planning. A company handed over against the clock rarely fetches its fair value, because the seller has no time to fix weaknesses, weigh alternatives, and negotiate from a position of calm.

The three year rule as a guide

As a rough guide: if you want to hand over in three years, you should begin today. Not with the transaction, but with the diagnosis. At the start there is no buyer and no price, only three sober questions:

• What state of maturity is the company really in?
• What dependencies exist, on the owner, on individual customers, on a handful of key people?
• Which structures need strengthening before a buyer examines them?

Preparation alone usually takes six to eighteen months. Add the process itself, that is outreach, negotiation, due diligence and signing, and you quickly reach a total of twenty four to thirty six months. The official SME portal's guidance on transferring a company points in the same direction: start early and plan in stages. So three years is not a generous buffer but a realistic frame. Underestimate it, and you end up cutting corners exactly where it costs the most: in the preparation.

What pulls the timing forward

Three years is the rule, not the law. Several signals move the right starting point forward, and they usually announce themselves quietly:

• Fading personal engagement. When the joy in the day to day drains away, the business suffers long before the numbers show it.
• The company's growing dependence on you. The more indispensable you become, the harder the handover and the longer its preparation takes.
• Competitive shifts. A market in flux does not wait until you are ready. Whoever hands over early hands over a company with an open future rather than one falling behind.
• First serious interest from outside. A concrete offer is a gift and a trap at once: a gift because it confirms your worth, a trap if you have to respond unprepared.

One case deserves particular attention: succession within the family. A successor from the family needs time to grow into the responsibility, to build trust with the team, the customers and the banks, and to find their own leadership role. This path often takes longer than a sale to an outside party, not shorter. Whoever wants to consider the in family solution seriously must begin correspondingly earlier.

No starting point is perfect, but early is better

There is no ideal moment when everything is prepared, the market is favourable and the company is flawless. To wait for that moment is to never begin at all. The advantage of an early start lies not in perfection but in choice.

The first step is not a commitment to hand over. It is a decision in favour of clarity.

An early, honest stocktaking gives you options that get lost under time pressure. You can fix weaknesses instead of explaining them away. You can test alternatives, holding a sale, an in family handover or an internal takeover side by side, instead of taking the first available option. And you can actively shape the terms instead of accepting the ones dictated to you by a buyer who senses your haste. Whoever starts early negotiates from strength. Whoever starts late negotiates against the clock.

That is precisely what the diagnosis is for: it commits you to nothing except an honest stocktaking. It shows you where you stand today, names your most important bottleneck and defines your next 90 days. From that clarity, any decision can be carried, including the decision not to hand over yet.

If you want to take this first step in a structured way, book a session: our succession diagnosis places your company across ten dimensions of succession readiness in a single sitting and sends you home with a prioritised plan.