Nobody likes to think about it, but it’s inevitable that one day you will leave your business. Whether you decide to sell up, retire or have to get out of business due to health reasons, it’s important that you plan for that day. A succession, or exit, plan outlines who will take over your business when you leave.
A good succession plan enables a smooth transition with less likelihood of disruption to operations. By planning your exit well in advance you can maximise the value of your business and enable it to meet future needs.
Make sure your succession plan is attainable - set a realistic timetable and measurable milestones along the way and stick to them.
Succession planning also applies within your organisation.
Succession planning within your business involves matching likely vacancies with appropriate employees, identifying gaps and supporting internal promotion. It is a more common process for senior management positions. Succession planning should be undertaken with skills planning to develop a picture of skills in a business.
Regardless of whether you are selling up, handling over management operations or planning for internal staff promotion, there are some major benefits in developing a succession plan:
Whatever your reasons for leaving the business, it is good business practice to ensure that the business' systems, processes, general operations and workforce left behind don't fall in a heap once new people take charge and you are out of the picture. Base your own approach on six factors;
Finally, when considering your succession forecasts, do consider the current and future implications on valued family members. It may take longer than you intended to leave, sell or wind up, and the earlier you plan your exit strategy, the more opportunity you have to include loved ones in the process and the smoother it will be for all involved.
Hard copies of any “How to” business guides can be attained by contacting Business Point.
Phone 1800 440 026 or email businesspoint@development.tas.gov.au
