Does Your Small Business Have a Succession Plan?
Starting your own business was a major turning point in your life. Ever since then, you’ve been stuck “in the now” as you manage and monitor your business on a daily basis. While this is what you signed up for, it can easily take away from your ability to look ahead.
As a result, one of the biggest struggles with growing a small business is preparing for what the future may hold. Luckily, a solid succession plan can keep your business striving forward even when distractions and unfortunate events occur.
Although a succession plan won’t be on most business owner’s minds, it’s something your certified public accountant or financial advisor will almost always recommend. Don’t worry, we’ll break down everything you need to know about succession planning so you can start preparing for the future today!
What Is a Succession Plan?
A succession plan is your small business’s key to the future. It’s an opportunity to ensure your company is prepared for any employee turnover you face — whether it be at the top or bottom. Yes, this includes yourself because you’ll need to make sure you have a replacement should something go wrong.
One of the biggest driving forces behind a succession plan is the ability to cross-train employees and have them ready to fill any role needed. If you have a manager role that opens up, the idea is to have someone that can step in on day one and contribute.
Benefits of a Succession Plan
Proper succession planning comes with a wide range of benefits to businesses of every size. In addition to improving employee turnover and employee retention, it can provide the following benefits to your business:
- Protects your company and prevents disaster from happening (much like insurance and security protocols)
- Keeps your highest-quality employees interested in working for you over the long haul
- Helps identify and prioritize your organization chart, as well as determining who fits best where
- Provides the necessary training, growth, and development needed for employees
- Helps smoothen the transition when employees, managers, or executives leave
- Secures your brand’s core values over the long-term
At the end of the day, a succession plan will act to disaster- and future-proof for your small business. Should anything go wrong, you and the rest of your company will know exactly what to do. Not to mention how satisfied your customers will be when their service doesn’t get interrupted.
How Do You Set Up a Succession Plan?
Putting together a succession plan for your small business is easier said than done, but having a quality professional by your side can make the process much easier.
If you haven’t set one up before, here are a few tips to get you started:
- Remember, a proactive approach is the best approach.
- Identify key roles that will need extra attention when an employee leaves.
- Monitor which employees would make a good replacement.
- Be open with those you consider future candidates and let them know.
- Update your succession plan frequently.
In the event you need extra help setting your business up for future success, we can help! Peter B. Scala, CPA, LLC has assisted clients for over 25 years and would be honored to extend those services to you!
References
Kenton, Will. “Understanding Succession Planning.” Investopedia, Investopedia, 5 Feb. 2020, www.investopedia.com/terms/s/succession-planning.asp.
Heathfield, Susan M. “What Every Manager Needs to Know About Succession Planning.” The Balance Careers, The Balance Careers, 16 Oct. 2019, www.thebalancecareers.com/succession-planning-1918267.