The need to succession plan early
Succession plans are one of the most important aspects of owning and growing a business. Without one, you may find yourself in a tricky situation at an inconvenient moment!
Getting yours in place early on in your business journey can help ensure a smooth exit when opportunity knocks! In this blog we offer some succession planning tools and approaches to get your planning unerway early!
What is Business Succession Planning?
A business succession plan is created by directors and partners and it allows them to gradually reduce the hours they spend in the business.
This is done by steadily, but intentionally, handing over the responsibility for specific roles and tasks to trustworthy and suitably capable employees.
Over time, the business will be able to run smoothly whilst not requiring such heavy input from the directors. This means that in turn, they can have more flexibility in their life or even exit the business if they so wish.
That is why it is important to get your succession planning tools in place early to give you future flexibility.
For more on what succession planning is, please view our recent blog on the subject.
Why plan early?
Planning early in business is always crucial
As a business owner, you want to be able to exit the business when you feel ready, whilst having full control over the decision.
Planning early will mean you won’t have to leave everything to the last minute, which could otherwise result in some detrimental and rushed decisions.
Planning early will eliminate any pressure further down the line as well.
If you or a family member become ill, or you have to take a break for any particular reason, you can rest assured knowing that the business is running positively whilst requiring little to no input whilst you need to be elsewhere.
If you have not planned early and these instances arise, you will find yourself in a very awkward position.
All the endless tasks you find yourself doing have a large impact on the business’s success and if you have not filtered them down early to appropriate employees then a large gap in results or essential activity may occur when you are not present.
As some of you may have learned in Cub Scouts – “be prepared!” – A very simple motto, which carries such heavy meaning.
What happens if you get your succession planning tools in place too late?
If you plan too late towards your exit then it can result in a few scenarios.
Here are two examples:
- Issues with transferring ownership – If your business relies heavily on you and your input then it could be hard to find new owners to take over, since they may not be guaranteed the same results as you off the bat.
It could require large input from them to get it off its feet to the place it should be. This could also be relevant if you are looking to pass ownership over to a family member. In simple terms…no-one wants to buy your job!
- Value of the business – This goes hand in hand with ownership transfer. If your business can not run by itself with little to no input from the owner then it could be harder to sell, making it less desirable.
Are you having trouble with your succession planning?
If the answer is yes and you want some help and guidance, regardless of the stage you are at with your succession plan, then please get in touch as soon as possible, and we can discuss succession planning tools relevant to you and your business.
The earlier you have a succession plan in place, the more streamlined and secure your business journey will become.
Contact us for a complimentary business review session with one of our business coaches or find out more about our Independence Coaching programme.
