A few weeks ago, I outlined the importance of making an exit plan—strategically mapping out a path to eventually leaving your business. There are many ways to exit a design firm, but one of the most alluring (and challenging) is succession.

What is succession planning? According to Ryan F. Barradas of financial management firm WealthPoint, “Succession and exit planning is a process that facilitates two events: financial security during retirement and success in the absence of current leaders. To do this effectively, succession planning must be addressed on five levels: management succession, ownership succession, relationship succession, cultural succession, and finally, leadership succession.”

If you’re interested in passing your firm down to a willing and able successor, here’s what you need to know.

Build a Leadership Team
Part of succession planning is preparing others to run the business without you. As you develop your team, start looking for leadership traits and business skills that show a candidate’s capacity to run the business.

There are many characteristics you want to be watching for in potential leaders:

• Vision: the ability to think ahead and create results
• Financial knowledge: the ability to read financial statements, develop and follow budgets, and understand cash flow
• Problem-solving skills: troubleshooting with little or no input from you as the owner
• Leadership skills: the ability to inspire others
• Business development skills: the ability to generate leads and close sales
• Execution skills: the ability to get things done efficiently and cost-effectively
• Initiative: a proactive approach to doing the hard work with focus and clear priorities
• An owner’s mindset: an understanding of the challenges and opportunities of running a business, along with an ability to develop practical solutions

Once you’ve identified potential leaders within your business, it’s important to find out if they are interested in leading the company in the future. Some team members are capable but don’t have the desire to carry that level of responsibility.

The leaders who are interested in the future need to be looped into regular meetings to participate in daily operations. These include weekly leadership meetings, quarterly planning and annual planning.

Share your financials
If you have the right people on your team, sharing your financials makes sense. The people who run the business need to understand where you are in the business. They will need to know your revenue, profit, cash flow, retained earnings, cash balances and much more. Without this information, they are flying blind when making decisions. At least one person on your leadership team needs to be able to keep the pipeline full, so knowledge of marketing and sales is essential.

Communicate and Train
Once you assemble your leadership team, communicate your future vision, your plans for your future exit, and their role and opportunities. You will want to begin training your team on all elements that you can likely do in your sleep, like (hopefully) budgeting, planning, managing, leading and problem-solving. Create a training plan for each position, and understand that as you elevate yourself to the full CEO position, your biggest role is being a mentor to each member of the leadership team.

Test Your Team
One of my favorite tests for the effectiveness of my team is to take sabbaticals. I just completed my fourth one on January 2. Each one has a different purpose, and is typically five to six weeks long. During this time, I try hard to stay detached from the day-to-day business, though I may be working on a big project for the good of the future business.

Before you take your first sabbatical (promise me that you’ll take one), you need to have a game plan in place and train your team for about a year before you go offline. If the team has an urgent need, be available by text, but do yourself and your future leaders the favor of letting them show you their ability to solve the problems without you. The more you trust your leaders to execute on plans, the faster they will develop confidence and skills to operate independently.

Trust and Verify
The final element you want to infuse into the succession planning process is trust. Even though you want to trust your team members, be sure to verify that the work is getting done within your given parameters. Coach proactively after “misses” and remember that you didn’t always know how to do all that you do without making mistakes. It’s a natural part of the process.

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Gail Doby is co-founder of Pearl Collective (formerly Gail Doby Coaching & Consulting), an interior design business consultancy that helps designers, architects and other creatives increase their profitability. Doby ran her own design firm in Denver for nearly 20 years and has a degree in finance and banking. Since 2008, she has been helping designers scale their businesses profitably and reach financial freedom. As a coach, mentor and business transformation specialist, she shares innovative ways to overcome the roadblocks, challenges and detours creative entrepreneurs face. She is also the bestselling author of Business Breakthrough: Your Creative Value Blueprint to Get Paid What You’re Worth. Her goal is to empower design industry clients to differentiate themselves, drive measurable results, achieve business projections, and create personal satisfaction through game-changing strategies and business practices.