If you own a business, you need to have talented people ready to take over key positions of your company in the event that you, or other executives, leave the company. You want the business to remain stable when you retire while ensuring that your heirs are also financially safe. That’s where succession planning comes in. If you’ve been thinking about business succession plans, here’s what you need to know.
What is a succession plan?
Also known as replacement planning, succession planning is simply a strategy for transferring ownership and leadership roles of a company to one or more employees. The main aim of business succession plans is to ensure that a business keeps running properly after a company’s owner(s) and/or key people retire, pass away or leave the company to pursue other endeavors.
How can you create a succession plan successfully?
As a business owner, the first step involves thinking about what your company will require in the future to stay competitive. You should also take your time to update your current job descriptions and come up with new ones for the new role(s). Determine the skills, experiences and knowledge that you think are critical to the company. Secondly, create a list of the succession candidate(s). While doing so, consider your employees. It’s possible to have one or more strong candidates among your employees who can step into the role(s).
When you’re satisfied with your candidate(s) set up a private meeting to let them know that you’ve singled them out for the positions you want them to fill. You should also assess how much you’ve invested in the professional development of your candidates and consider stepping up your efforts in this regard. For instance, you can connect them with suitable mentors to help them polish their interpersonal skills, communication skills and diplomatic skills.
Your business is not a static entity. As time changes, it also has to change, and, as the business owner, you have to remain prepared for it. One of the best ways of ensuring the continuity of your business is taking the necessary steps to have a solid succession plan in place.