As a small business owner, you want to ensure your businesses’ future is secured should you choose to move on or enter retirement. For effective business continuation, entering into succession planning ahead of time can provide the strategy and support needed to keep everything ticking over. As a part of exit planning, succession planning offers the insight and forethought required to ensure your business continues following your departure.
We cover all you need to know about implementing succession planning below:
What Is a Succession Plan?
A succession plan is a process or set of steps you put in place to help your business to function effectively when you leave. Whether you’re stepping down from a senior role, retiring, or starting a new business, succession planning allows you to get ahead and ensure someone is ready and waiting to take over your important role. Succession planning allows your exit from your business to go smoothly with as little disruption and upheaval as possible along the way.
How Does Succession Planning Work?
Succession planning requires a few steps for success. These include:
Step One: Determining Value
The first stage to planning for a successor is understanding the value of the role and what that person will need to ‘step up’ to. A clear overview of responsibilities, any required skills, and the overall value of the role all go into the initial stage of succession planning, which informs the choice of successor.
Step Two: Identifying a Successor
Identification of a successor within the company can then be completed based on the determined responsibilities and requirements of the role. At this stage, evaluations can determine what training and mentorship will be required for that individual to step up.
Step Three: Funding the Plan
As succession planning ramps up, funding should be allocated to the training and upskilling of the chosen successor. At this stage, plans for your exit from the company can be solidified, with the final date and timeline in place ready for succession to happen.
Succession Planning and Exit Planning: What’s the Difference?
Exit planning and succession planning are often used interchangeably. This ambiguousness is for a good reason, as both are very similar processes. While exit planning may cover other financial and legal aspects of leaving a role, succession planning is solely focused on the process needed to ensure a chosen individual can step up to your role. Succession planning is a vital part of exit planning. A trained professional will be able to talk you through how to plan for your departure as effectively and practically as possible.
How Do You Implement a Succession Plan?
If you plan on leaving your business in the next few years, it’s never too early to start succession planning. As experts in all areas of business planning, our team at Congevity can give, serve and improve upon your planning for peace of mind when you choose to make your exit. You can rely on our team to provide the insight and support needed to make succession planning easy.