18 Oct Why all businesses need to plan for succession
Hypothetically speaking, if you were hit by a bus tomorrow, how seamless and pain free would the transition be – both for your business and those who rely on it? Succession Planning isn’t just about retirement. In an unforeseen event would the operation, management and value of your business be compromised?
It isn’t just about securing your future.
Succession Planning is still an extremely valuable exercise if you’re planning to retire in 20 years, or if you’ve already lined up your successor. Should something unforeseen happen to you, this planning will downgrade a major crisis to a significant, but manageable, event.
By having the conversations now and documenting clear intentions, you could save yourself (and your stakeholders and family) a lot of pain should an unexpected event occur.
It’s also about efficiency.
Planning for unexpected scenarios forces you to assess who does what, why, and how they do it best:
- Is the right person performing the task?
- Is their process the best way of doing the job?
- If multiple people perform the task are they doing so consistently?
- Have we defined and documented the best process?
- Should this task be the responsibility of a single team member?
It’s about providing a safety net for your team. Documenting the key business processes in your company enables you to devise the most efficient system for each task. Having a clear procedure to follow is helpful when a team member is absent, but most importantly when it comes time to transfer this knowledge to a new team member, manager or owner.
A robust and effective Succession Plan takes three to five years from initial planning to implementation.
Having said that, any plan is better than no plan. Generally, the longer you have to execute your plan, the bigger the opportunity you have to maximise the value of your business and therefore the capital you extract on exiting.
A Succession Plan is not something you write and leave to rot in a dusty drawer. Succession Planning is an important part of your business strategy that requires regular attention and ongoing development!
Involving key team members in aspects of planning will engage and empower them as the journey begins.
Want help your developing your Succession Plan? Get in touch!