Transition is the time between when you make your decision – to sell or merge, go public or retire – and the day it happens. A key group of advisors – accountant, attorney, financial advisor, banker, perhaps even a management or transition consultant – becomes your core team for designing and implementing your transition plan.
To ensure that your company runs smoothly during this period, you need to draw up a transition plan (especially important to your buyer if you’re selling). This plan should do the following:
- Identify the scope and objective of the transition, as well as which employees, departments, products, services and resources will be affected.
- Establish a timeline that includes key milestone dates. If you’re not sure how long a specific task will take, consult your employees or specialists to get an accurate guesstimate.
Detail the transition governance. This section of your plan covers:
- Roles and responsibilities
- How you’ll communicate during the process
- The process for escalation
- How you’ll assess transition progress
- When and how to conduct meetings
- How you’ll report on the status of changes.
- Milestones you’ll seek
- How you’ll manage your resources
- The process for training employees
- Determine (and describe how to mitigate) risks. Do you think you may lose customers when they hear of your plan? Could key employees leave? Identify these risks and determine what you’re going to do to minimize them.
- Provide an overview of your finances. Team up with your CFO to develop a transition budget and how finances will be managed during this period.