King Lear may seem an unlikely source of guidance for a chief executive who built a company writing business-plan software. But Tim Berry says when he planned to turn over Palo Alto Software Inc. to his daughter, the story resonated with him.

“Lear didn’t really manage to figure out how to give away power,” he says.

Mr. Berry, 59, named his daughter Sabrina Parsons, 34, CEO in April. He now reports to her as president of the Eugene, Ore., firm, which has 40 employees and more than $10 million annual revenue.

He wasn’t — and still isn’t — interested in retiring. But several factors helped him ease the transition. Here are some tips from his experience:

Prepare to let go. Mr. Berry says it took about a year of reflection to prepare himself to relinquish control. That’s where King Lear came in. He re-read the play in September 2006. “That was the beginning of me starting to think about getting [myself] ready to give the power away,” he says. “I had to make sure I was ready to leave.”

One exercise he says may help: Imagine the transition fails and you’re writing a book about why. The reason, he says, often is because the former leader didn’t let go.

Find a sweet spot. Mr. Berry says retiring executives seeking to stay involved may be able to carve out a role they enjoy and that benefits the company as well. Options may include being the company spokesman or performing a function related to the path they took coming up through the ranks, such as sales, marketing or finance. But the person shouldn’t have anyone reporting to him or her to minimize the chances for interference.

Prior to the change, Ms. Parsons had been urging Mr. Berry, whose first love was writing, to blog more as the firm’s expert and educator. Now blogging full time, he posts up to 10 times a week to more than three blogs, including blog.timberry.com.

But, he cautions, not everyone may be able to find a niche that’s as good a fit.

Make a quick, clean cut. Mr. Berry’s decision to step down was announced and implemented within a week. No one reported to him any longer, but some employees came to him for decisions out of habit. He would simply remind them of the change.

Mr. Berry says he sometimes must resist the temptation to interfere — even when he feels the situation is a special case. “The person to whom you’ve given the reins doesn’t have the power if you’re in the backseat, saying, ‘No, turn left,’ ” he says.

He has five children in all, and two others, in addition to Ms. Parsons, are in the family business. Still, Mr. Berry skipped advice he read calling for getting family members in agreement on what will happen ahead of time and documenting it.

He says defining all the strategies and rules beforehand often can constrain decision-making. Instead, his strategy was: “Get up out of the car…and say, ‘Here, you take the driver’s seat and drive.’ “