What is succession planning?
Success planning is a process undertaken by a business owner, ensuring their business is left in good hands after their exit. This means the business will be ready deal with unexpected circumstances, and is likely to have stronger leadership. The plan will also encourage regular reviews of the business' goals and objectives. Succession planning is often seen as an important part of an exit strategy.
Why is succession planning in business important?
There are many reasons why Succession Planning should not wait.
Dealing with unexpected circumstances in business
Do you know what will happen to your business if you die or something else unexpected happens? If the answer is no, you need to give it some thought. Unfortunately, you cannot thoroughly plan for the unexpected, but you can plan accordingly so that the business will survive if tragedy strikes.
Succession planning can help the business right now
Business owners are no longer just using succession plans when the leadership is changing. Plans can be used right now to benefit the business' growth. As a result, executives will review the company's goals and ensure that strong leadership is being developed already. Even if the market changes, a succession plan will mean the business will always be prepared to handle it.
Letting your staff speak
If you’re running a family owned or small business, the process of succession planning will allow people to share their anxieties. Staff members will feel like they have a responsibility and you won't have to carry the entire burden of sustaining the plan.
Helps with the money side
A succession plan could help sustain healthy cashflow. For example, a plan will let you know how much you will need for future income and the expenses you might have once stepping down from leadership. Ask yourself about all of your business-related expenses such as your car or professional memberships.
See and involve all employees
Good planning will make you resist the temptation to just look at senior staff and look to all employees. The people who do the hard graft that keeps the business afloat should be considered in the planning process. As regular communication increases within your business, and by giving HR your succession plan, you will strengthen your company culture.
Succession planning increases morale
It is exciting to plan for change and it can motivate your employees and maintain their loyalty to your business. Whilst the primary reason for a succession plan is to be ready for disaster, looking to the future will promote a forward thinking ethos and lay a better foundation for business success.
If you're looking for help on your succession planning, why not consider joining a TAB Advisory Board or finding out more about our one-to-one coaching sessions?
