As a business owner, what do you hope happens to the business when you retire or die? Will it be closed, sold, or transitioned to family or an employee? Usually, we want something as personal as the business we have developed and nurtured to carry on and thrive. Addressing what happens falls under the broad rubric of succession planning.

For the owner of a closely held business, I have a few recommendations for your consideration as you plan for the continued success of your business after you are no longer actively involved.

As an initial matter, don't just let whatever happens, happen—make a plan and work it. Putting off planning and waiting until you're about to retire—or a sudden event forces the issue—severely restricts your options. Decisions then need to be made hastily amid chaos, with many choices taken out of your hands.

Proper succession planning is done well in advance, in relative calm. It also is a continuing process, not a one-time effort that is then abandoned in a file marked "that's done." The plan should be one that is dynamic enough to flex with changes in your business, the economic and business environment, and your people. If you are considering transitioning the business to a family member or business employee, your plan should be revisited as they mature and demonstrate various degrees of skill and passion or dispassion for the enterprise.

If the plan is for transitioning management control to an employee or family member, you have a responsibility to ensure you are setting them for success and not failure. For instance, have you made yourself indispensable? If so, you should consider how you can move toward making the business sustainable without you. Building a strong management team that is enthusiastic about the vision for the business goes a long way to assuring that sustainability.

Autocratic leadership is not a fertile environment for developing such a team. Strong leadership will ensure that each person feels they are meaningfully contributing to the success of the business and are being properly recognized for it. Further, knowing that the owner welcomes input encourages them to participate in pushing the business forward, as does delegation of authority whereby their decisions can directly affect the business. Autocratic, top-down micro-management kills that spirit. People in the organization then become merely employees working for a paycheck. Their ability to take over the business or serve as a strong member of a management team can't be evaluated then.

Consider making leadership training an ongoing, critical aspect of your business—not just for succession purposes but to create an environment of challenged, fulfilled individuals who are passionate about having the business succeed and grow. Leadership is not a hierarchal matter. Leadership is, by one definition, influence. If each person in the organization feels as though they have some influence on the success of the business, you will build an environment that's not centered on you as the indispensable owner. The attributes of leadership, if cultivated, create a healthy work environment. Those attributes are: honesty, forward looking, inspirational, and competence. Each of those furthers the health of the work environment and the sustainability of the business. While all this may seem a bit philosophical, it is the critical mesh needed to allow whoever is the new owner or chief executive to succeed. The healthier the business, the more assuredly it will survive your departure and continue to flourish.

Along those same lines, don't get caught in the box of looking for a clone of you. We are looking for someone to push the business forward, not a caretaker. Your skills and experience were important and successful for the business to date, but they may not match what is needed to further grow the business.

Perhaps there are areas you have discovered about yourself that, while adequate, could have really accelerated the business if they were demonstrably better. Would a slightly different vision enhance the business? As my father reminded me, always hire people who are brighter. Again, we are not after someone to solely stay the course or maintain the status quo. You have developed and nurtured this business and now that you have decided to let it go, assure it flourishes.

For some, though, the business has been developed with the idea of being a family business to be handed down from generation to generation. Recognize, then, that compromises may have to be made. It is always difficult to mix personal and business considerations. Realize also that a good entrepreneur is a combination of skill and desire. If either of those is missing in the successor, we've set them up for failure.

Be careful that the idea of a "family business" isn't solely your dream. Allow an avenue where the selected son or daughter can simply move on if he or she comes to the realization that the only reason they are running the business is to fulfill mom's or dad's dream. Otherwise, the mantle of running the family business will be a huge burden rather than a joyful benefit.

As well, if one of several siblings ends up running the family business, the idea of fairness among family members can become a sensitive issue. There are several methods of addressing the issue. First, it's possible for brothers and sisters to continue as minority owners of the business without usurping the control needed by the one running the business. The one running the business also needs to be fairly compensated for taking the risks and putting in the hours to assure the business thrives.

The minority interests can then be bought out. If such a buyout would threaten the viability of the business, then sometimes life insurance might provide a useful tool. The point is that fairness can be achieved through a variety of ways and should not be viewed as a prohibitively high hurdle.

The crafting of a successful succession plan, then, is not a matter of filling the blanks on a template. It's not solely about identifying a person to serve as the chief executive. It's much more and involves strengthening the entire business through careful nurturing of a strong business culture.

It's a dynamic process, not an end product. It is ultimately about leadership at each level of the structure twined with thoughtful planning and grooming of the succeeding management team.