You have worked so hard to build a business and/or an organization. If you are like me, you want your business to continue to make an impact long after you are gone. You may still be young, but it is never too early to plan for the future. Planning for the future includes succession planning. Succession planning doesn’t just include the owners but all the key individuals that help the organization operate smoothly.
What exactly is succession planning? Succession Planning is the process of identifying key individuals and important positions within the organization and creating a pipeline of talent (successors), according to the National Institutes of Health (NIH) and Robert Half. A successor is an employee with the skills, abilities, and knowledge to fill a vacant position.
What are the risks that arise from a lack of succession planning?
- Significant loss of time spent getting a new employee up to speed
- Potential disruptions to daily workflow
- A loss of critical knowledge that may never be recovered
Here are 5 steps to successful succession planning:
- Develop a plan – This plan will consider all the key roles in your company including your role as an owner/leader.
- Identify potential leaders – Who has the skills, abilities, and knowledge to fill the vacant role?
- Communicate with the potential successors – Let them know that they are valued and being considered for a leadership role in the future. Use professional and leadership development programs to prepare successors.
- Incorporate succession planning in your recruiting and hiring efforts – This will allow an organization to identify and fill talent gaps.
- Determine your own succession plan – Some business owners hope their children will take over the business when they retire. In my line of work, I see that many times the children are not interested in taking over the business. This leaves the business owner with tough choices regarding when to exit and how the business will continue to thrive after their gone. Selling the business may be an option. Is there a valued employee willing to buy the business?
In summary, succession planning is critical for the future success of your business. It will ensure that critical knowledge is passed down to future generations.
To learn more about LonaRock, LLC and our business finance consulting services, please visit our website at www.lonarock.com or contact us directly at 234-217-9033. We look forward to helping you reach your financial goals and helping you obtain the best possible financing for your company.