Is it time?
You may be wondering, when is the best time to begin thinking about a Succession Plan? As the tried-and-true saying goes, “Don’t put off tomorrow what you can do today.”
An astounding 58% of small business owners have no succession plan, according to a 2017 study of 200 privately held businesses, conducted by Wilmington Trust. The last thing any business owner wants is for an unexpected tragedy or unplanned scenario to happen which then forces someone who is not prepared to take over. With no structure or plan in place, the new leader is destined to struggle and likely fail.
This is just one example of why it’s never too early to begin building a succession plan; the rule of thumb is no less than five years. At the point many realize they need a succession plan, it’s probably already too late. Don’t fall into that category!
When is the best time to start planning for your succession?
The ideal time to start succession planning is when your business is starting to take off. You want to protect all the heart and soul (not to mention, money and resources) that you put into your company, yes? It is possible to safeguard your business without it being an overwhelming process.
If you’re ready to dive into the process wholeheartedly, stop here and go read this blog instead, which offers 5 get-started steps for succession planning. If you’re just beginning to familiarize yourself with succession planning and aren’t ready to dive that deep yet, keep reading.
How do you know what your future organization should look like from a staffing and leadership standpoint?
Succession planning focuses on having the right people and financial structure in place so that the value of your business will continue to increase for many years down the road. Ask yourself: who are the 1 or 2 successors that could fit into the most critical job positions in the future? Do they have the skills and experience necessary to be successful? Are they experienced in many aspects of the business and respected by colleagues, clients and business partners?
Is there an easy way to determine if potential successors have what it takes to handle certain positions?
As you’re thinking about possible successors and positions, you should create a success profile for each position. This includes documenting the skills, abilities and behaviors needed to be successful in a specific role. Once you have that, compare the individual to the success profile and you can identify what assets they have and what deficiencies there are, and then later you can create a development plan to ensure that person is successful in that role going forward.
Starting to warm up to the succession planning concept? A great next step is to check out this useful pre-succession planning checklist that offers organizational and pre-planning tasks that will help ease you into the process without being too overwhelming.
The best thing you can do for your company is to start the succession planning process now. Don’t put your business, the financial lives of your employees, or your personal financial situation at risk. Instead, take the time well in advance to plan out a thoughtful business ownership succession plan.
For more information and resources on succession planning, check out …
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