For many business owners the thought of the business outlasting their own ownership and management never occurs to them and has never been considered. For other business owners, the idea of the business being passed on to family members, partners, or others has been well planned and was part of an initial vision for the company's future. Regardless of which scenario a business owner finds him or herself; the process required to handover the reins of the business to another person, even a family member is one fraught with emotion, peril, opportunity, and anxiety.

Business As Asset

One of the advantages to owning a business is that in addition to creating income for one's personal use and controlling one's future more directly, there is also an asset that is being developed that has a value on the open market and can be sold. That asset may be customer lists, the ongoing business itself, the equipment, or any other aspect of the company. Unlike working as an employee where the primary income stream occurs through salary and when the employee stops working, the income stream also ceases; a business can continue to provide income even after the owner is not directly controlling the actions and decisions of the business.

Handing Over The Keys

However, the decision to reduce or remove one's involvement in the day-to-day business decision-making is a difficult one for many owners. The business is often the result of the owner's hard efforts, dedication,

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wisdom, insight, and sacrifice. The business will likely have undergone challenges through start-up that the owner had to successfully navigate through and steer towards success. In certain situations, the business and the owner are so tightly enmeshed that the owner cannot easily see where the two can be separated from each other. The owner IS the business and for better or for worse, removing the owner is a dicey proposition that raises the fear of also killing the future potential of the business.

But, there are times where the owner may reflect candidly upon his or her own skills and recognize that the business requires a different steward or captain to lead the business past the horizon and into unchartered waters. The skills of the entrepreneur are not always best suited for the future needs of a business that may have entered a different phase of growth, is competing against competitors that require different leadership, or entering new markets outside the experience of the founding owner. As hard as it is for the owner to pass the torch to the next generation of leadership, especially if it is a member of the owner's family who once called the owner "Mom" or "Dad" - it is a process that can be done professionally to protect the future of the business if certain steps are followed.

Identify The Needs

Honestly assess what the skills required of the new leader need to be for the immediate future and long-term. The same skills that were mandatory at start-up may not be what is needed on an ongoing basis:

-Technical skills - define what the level of experience and technical know-how needs to be for the leader of the company. Do not fall into the trap to defaulting to the belief that the leader MUST have expertise in engineering if what the company truly needs is a marketing whiz to take it to the next level.

-Managerial sense - What prior managerial experience will the candidate need to succeed in driving the company towards its goals? Does it require someone who has experience in working with remote or multiple locations?

International experience? More hands-on or delegation style of management? -Industry background - Determine how essential it is that the person be from the same industry as the company's primary business. There are arguments that can be made that going outside the industry can provide a shot in the arm to the business with new thinking and creative perspectives. There is also a time when the culture, customers, and unique requirements of leading certain companies are better met by someone who will not have as long a learning curve to assimilate how things get done in this industry versus previous industries the prospective leader may have worked within.

-Creativity and Risk Taking - One of the common outcomes of a business that is being led by the original owner is that a malaise can set in at the company because of the owner being deeply wedded to the original approach to business, a favored product line, or other remnant of how the company performs. A new senior leader can shake things up a bit by challenging conventional wisdom and providing a fresh look at potentials or alternatives to the accepted and established approaches.

The owner of the business should vigilantly analyze whether what is needed is a replica of him or herself or someone with complementary or different skills. The bias if left unchecked, is to hire or promote in one's own image. We all prefer to be around people and think more favorably of people that are more similar to us than not. However, when choosing a new leader for a company, there may be times when it is more appropriate to choose someone that has a different point of view or perspective than one's own. While it will likely be important that there be a positive relationship between the owner and the new leader in order for the transition to progress smoothly (especially if the original owner will still participate in the business), it is not always beneficial for the new owner to be a clone of the previous owner in order to achieve future goals and objectives.

Don't Forget the Employees

Any time a change in corporate leadership is to occur, there will be a sense of uneasiness among the employees. It is natural for them to be uncertain of what the new leader coming on-board or being promoted from within may mean for them personally. Change is disruptive and while it is not necessarily negative (nor is it necessarily positive), it does force questions to be raised and cause people to process the ramifications of the change at their own pace. Therefore, it is essential that the employees be communicated with, have opportunities to ask questions, and if appropriate to do so, even brought into the process themselves in choosing the new CEO or leader.

A leader is only gong to be as productive as those that are being led. It would be a huge mistake to discount the importance of the employees in ensuring that the new leader is able to succeed in guiding the business to a newly defined finish line or to achieve a goal that has been established. A leader that is not respected by employees will have a much more difficult time and will fail far more frequently than one who has aligned the employees toward a common goal and has the commitment of the entire company to achieve it and are willing to be led by the newly installed executive.

Pass The Baton

As any spectator of Track & Field can attest, the factors to watch for when viewing a relay race are:

-Not to get too excited when the first runner has a lead over others. The test is does the last runner still have the lead at the end of the race

-Each member of the relay race team must do his or her part to maintain the lead, reduce the lead of the runner out in front of the others, or increase the distance between oneself and the runners trailing.

-The handoff between runners must be seamless. A poor handoff can lead to a dropped baton and a disqualification of the entire team at worst, or a stumble and a poor transition that hurts the team's overall performance.

Choosing a new leader is not a decision that a business owner can make easily, but with preparation and forethought, it is one that can be done successfully and with the needs of the business in mind that protects the value of the asset and provides income into perpetuity.

David Zahn is a serial entrepreneur and consultant to Fortune 100 businesses (www.zahnconsulting.com) as well as entrepreneurial startups (www.startupbuilder.com).

The opinions expressed are the author's and not necessarily those of connpost.com. Please direct comments to cdauber@ctpost.com.