Author Léon Danco explains why the formula for recasting the one-man show isn't all that complex.
Survival is the Goal -- Both the founder and the successor should have one major goal in common: perpetrating the business. Each has his own responsibilities in making sure the goal is reached, but each has to also work with the other and understand what's really needed. Many of the succession plans I see are feats of technical wizardry. They're put together in the erotic dreams of financial planners and tax lawyers. But, even with all their fetching technicalities, they often don't go to the real heart of the real needs of continuity. There is a lot more involved than saving taxes. The goal of everybody involved should be to transfer management and ownership in such a way as to prevent the all too common conflicts that can cripple or destroy a business. The survival of the business should be the major objective of everything that's done.
The yardstick for selection and employment for that reason must be as practical and objective as possible -- and the best one I know is the yardstick of competence. The business is too fragile and valuable to allow passing out management positions on the basis of blood alone. The same judgments I'm suggesting the founder place on his managers, he should place upon his potential successor. This demand for competence places a greater challenge on the successor, of course, but I have seen over and over again that it makes that management transition easier and less traumatic for all involved. This is why I'm so much in favor of the successor's cutting his management teeth working for somebody else. Under another's roof, the business owner's son or daughter is just another employee and everyone knows it. They sink or sail depending on their actions and their abilities. They also can learn management from professional managers, discovering there are other ways to do things than the way Dad does them.