Business owners across the country understand why succession planning plays an essential role in the future success of any company. Getting the process started, however, may sound a bit more complicated. Perhaps you’re a new business owner or you’ve run the same company for years.
Regardless of whether succession planning is in the near (or not too distant) future, here are a few financial tips for you to consider.
Basics of Succession Planning
What is the process of succession planning? Think of it like coaching a sports team: If your quarterback gets hurt, do you have a backup—a successor—who can step into that role and lead the team to victory?
Look at any professional team. They actively work to train up-and-comers and identify talent from within. While they may recruit players from other organizations when needed, they typically draw players up through the ranks. At every level, players hone their skills and learn the team philosophy. And by the time they make the big leagues, they perform at the highest level and are aware of what the franchise expects from them.
Succession planning makes this possible for your business, too. As a leader, your job is to consistently assess your employees, their skills, their goals, and the goals of your business, while making tentative plans to address potential changes.
Remember: Every business grows and changes. You may gain or lose accounts, decide to expand, or need to downsize. Employees may retire or choose to leave. You need a strong bench of players ready to step up––or you need to be ready to recruit from outside your organization.
What Should My Succession Plan Include?
How do you write a business succession plan? Every business is unique, so every succession plan will look different. However, there are some key points you should be able to touch on:
Starting with the business itself, not the people, will help you more clearly identify the right skills for each position. That’s why a strategic plan is an important start to the succession plan.
Take a look at the breadth and depth of your talent.
- Is your bench short anywhere? If so, will you train high performers or plan to recruit from the outside?
- Who are your position players? Some team members may not be vying for management and are content to be a high performer. That’s incredibly valuable, and it’s important to know ahead of time who’d rather move over than up.
- Who would be the hardest to replace? Remember, while this will include C-suite execs, there may be others who have company knowledge or expertise that is rare or valuable.
Communication with Your Team
You don’t have to share the entire succession plan with everyone, but managers and team members should have an idea of where you think they and their team will go.
Revisit the plans periodically – every quarter or year, preferably – to ensure it’s always top-of-mind and that it evolves, if needed.
Start Your Succession Plan
For a professional advocate for your company’s future, contact us at Focus Financial. Our vast experience of strategic succession planning allows us to help you get started right away and make the right decisions for your business today, tomorrow, and in the future.