Kingdom Business Life Cycle: The Succession Phase

Now Joshua the son of Nun was full of the spirit of wisdom, for Moses had laid his hands on him; so the children of Israel heeded him, and did as the Lord had commanded Moses…After the death of Moses the servant of the Lord…the Lord spoke to Joshua the son of Nun, Moses’ assistant, saying: “Moses My servant is dead. Now therefore, arise, go over this Jordan, you and all this people, to the land which I am giving to them—the children of Israel. Every place that the sole of your foot will tread upon I have given you, as I said to Moses. – Deuteronomy 34:9; Joshua 1:1-3

And He led them out as far as Bethany, and He lifted up His hands and blessed them. Now it came to pass, while He blessed them, that He was parted from them and carried up into heaven. – Luke 24:50-52

A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored up for the righteous. – Proverbs 13:2

The time when you are ready to transition your business or ministry may be a long time away – is the concept of succession really relevant for you today? What do you need to know to begin the process of planning for your succession?

Any student of the Old Testament knows that in the history of Israel, one king followed another, and many did “what was right in their own eyes” without following the Lord. Every once in a while, a king would love the Lord and serve his kingdom well, only for his son and successor to follow him and rule unjustly. These stories show us that the importance of succession — the final stage in the Kingdom business life cycle — cannot be emphasized enough. Your successor has the power to destroy or improve your life’s work and wealth.

Succession in business is the season when a business is able to transition from the current leaders and owner to the next leaders and owner. Succession, or exit planning, is experienced in many areas of life: parents leaving a legacy and an inheritance to their children, a leader or manager transferring responsibility upon their departure, or a king or president transferring power when their rule is over. Men of God in the Bible such as Abraham, Moses, David, Paul, and even Jesus addressed succession, training up leaders such as Isaac, Joshua, Solomon, Timothy, and the disciples to follow in their stead.

In order to be a good steward of the business that God has entrusted you with as an entrepreneur, you need to plan for succession. Planning for succession ensures that God’s vision continues beyond your lifetime. It ensures a smooth, orderly transition of the business upon the entrepreneur/ CEO’s retirement, incapacitation, or decision to sell. Whether the entrepreneur is pondering an outright sale or training a promising leader to lead the business, a plan is an absolute necessity. The earlier you start planning the better. Business ownership transfer is inevitable; it will happen either as a result of careful planning, death, or the entrepreneur no longer able to lead the business.

Even though exit planning and succession planning are used interchangeably, there is a distinction that should be understood to adequately manage the overall planning process. The first part is the process is exit planning: directing how to transfer the business when you exit. The second part is succession planning: determining who will run the business upon your departure.

The succession phase is marked by the following characteristics:

• Lasts 20 – 30 years, sometimes longer.
• There is a distinction between ownership transition and leadership transition.
• The business could transition to family, employees or a third party.
  • Family members should be the first choice, but most qualify and earn the right to take over the business.
  • Employees should be the second choice, most also qualify and earn the right.
  • Using a third party should only be the option if the other two are not possible within God’s will. It is difficult to preserve the core organizational values with a third party succession.
• The appropriate value of the business should be captured.
• Proper execution of this phase should preserve the business for at least three generations.
• The entrepreneur must repurpose himself or herself, making sure he or she has a clear vision for the next season of life.
• The entrepreneur should understand that this transition, despite careful planning, could result in his or her legacy being compromised. Most businesses do not make it beyond the second generation. However, careful planning should mitigate this risk.

My prayer for you today is that you would start to think about succession, seeking the Lord for wisdom and asking Him to show you how to plan for your departure from your business or ministry.