A successful succession plan is the key for businesses that want to continue moving forward.
What is succession planning?
Succession planning is a business strategy for identifying and equipping future leaders at your company. It addresses the critical needs when an employee retires, resigns or leaves for any other reason. By training high potential workers for advancement into key roles, you ensure your business is prepared for all possibilities.
Why do we need it?
The need for succession planning in any business is relatively simple. There are two basic needs.
What would happen to my business if I get hit by the bus today?
While this isn’t what any business owner wants to think about, it is important to plan for an incident that would remove key employees, including yourself, from the company. It can be an illness, accident, family dynamics shift, or a winning lottery ticket that changes your business leadership.
Replacing leadership in your workplace due to an unexpected circumstance is not a common occurrence but one that needs to be strategically planned for, to keep your company running smoothly.
What plans have I made for an exit strategy when I retire?
One vital part of business ownership is mapping out what happens to your business when you are ready to retire. As the business owner, you are the expert when it comes to your company. When you retire, don’t let your expertise retire with you. Succession planning is vital because it allows valuable knowledge to be passed on to the next generation of leadership.
Developing a strategy for retiring leadership is important to prevent a leadership gap in your organization. Veteran employees at every level have a wealth of experience that doesn’t have to disappear when they retire.
Only about 15% of small businesses have a formal, legal succession plan in place. Unexpected and future leadership changes are the two realities very often overlooked by small businesses. Schedule a consultation with MSM Advisors to learn more about our business advisory services.