It’s a question no small business owner likes to think about, but what would happen to your small business if you suddenly had to leave – whether due to illness, a family emergency or even death? Would someone else be able to step up to keep things afloat and continue your vision?
Or, here’s a nicer notion: You’d like to retire someday, right? Is the enterprise in which you’ve invested so much of your time and energy prepared to carry on without you at the helm?
Succession planning isn’t just for big companies. In fact, it may be even more essential for small businesses since there are fewer people to take over should you leave – whether planned or due to unforeseen circumstances.
Small business owners already have so much on their plates that succession planning can seem like a huge chore. But taking steps to tackle the issue can result in peace of mind for both you and the workers who depend on your small business for their livelihood. And along the way, you may develop valuable insight about your company’s strengths and weaknesses. Consider these tips to get started:
Think about individuals at your small business who might have the talent and drive to carry on what you started. As you identify possible candidates, talk to them about their long-term plans. Don’t make assumptions, though. Your child may want to pursue another career instead of taking over the family business, and your long-time employee may have no interest in managing others. If a suitable replacement isn’t on your radar, start prioritizing leadership potential when adding new hires.
Test the waters and pave the way for a smooth future transition by increasingly giving your selected replacement more responsibility. Through greater involvement in activities and decisions, he or she will gain confidence and knowledge. Likewise, co-workers, clients and vendors will begin viewing this person as a leader.
But grooming efforts shouldn’t be limited only to that person. A strong staff can make any new manager’s job much easier. Cross-training and involving your team in as many aspects of operations as possible provides a solid foundation for carrying on business as usual whether you’re out sick or moving on to new ventures. A multi-functional staff also puts your small business in a better position should any team member quit or need a leave of absence.
Revise as necessary
The hope is that you’ll be able to implement an exit plan in stages on your predetermined timetable. However, the future can be hard to predict – especially for a growing small business. Periodically reexamine your succession strategy to assess its effectiveness in light of new circumstances and objectives.
And don’t be afraid to seek help, especially if transferring ownership as well as leadership. Advisors, lawyers, and accountants can steer you through the complexities of succession planning and ensure your small business’s legacy endures.