So many people get caught up in the process of setting up and running their business that they might not pay that much attention to the idea of succession planning. When you retire, who’s going to take over your business? Do you have children who might be interested in continuing your legacy? And, if not, do you have a protégé who can keep your business going? Succession planning involves finding someone with a vision who will be able to develop and grow your business rather than just keeping it static - someone who has the flexibility necessary to adapt to the changing needs of the market.
Most successful business owners start their business and, through trial and error, learn what’s needed to make it successful. However, the person who takes over from you doesn’t have to learn things the same way.
The Importance of Succession Planning
Succession planning has now become a buzzword, especially in large firms. If someone is stepping down from a position of some importance, it becomes necessary to find someone else to take their place so that the company can continue to function smoothly.
When it comes to small firms, however, people may not use the term “succession planning.” But most business owners put some thought into figuring out who’s going to take over from them when they retire. They might encourage their children to work with them so that they can learn the ins and outs of the business.
If you’ve just started thinking about succession planning, consider the following reasons why it’s important:
- Strategizing in Advance: Training someone to take over your business is a long process. Succession planning makes it easier by encouraging you to strategize in advance.
- Running Your Business Your Way: With succession planning, you get to train the person who will succeed you. This means that your business will continue to be run in the way that you want.
- Finding the Right Person: Sometimes, you might think that one person has what it takes to run the business, but they might not work out. If you start succession planning in advance, you can always take someone else under your wing and train them instead.
- Retiring When You Want: If you’ve trained someone to take over from you, you can choose to go on as many vacations or retire as early as you want.
- Infusing Your Business with New Blood: When you hire someone to train them to succeed you, chances are they’re also going to have some ideas about your business. A good protégé is one who has something to contribute even while you’re still the boss.
Succession planning is important because it enables your business to continue running smoothly, even when you’re not at its helm. By using the strategies listed above, your organization can achieve the goals below:
- Longevity: Succession planning ensures that your business will have longevity. Many business owners can’t continue putting in the same hours as they approach retirement age. So it’s necessary for them to find someone who will be able to do so.
- Long-Term Aims: It forces you to think about your long-term aims for your business. Once you start thinking about succession planning, you are also forced to think about where you want your business to go ten years from now.
- Mentorship: With succession planning, you get to experience the joy of mentorship. Any good teacher will tell you that there’s a great deal to be said about sharing the benefit of your experience with others.
- Vision: For most business owners, running their own business isn’t just about making money. It’s also about the physical realization of their mental vision. Training a successor means that you get to imbue them with this vision.
How to Tackle Succession Planning
Having understood the importance and the advantages of succession planning, you might still be at a loss about how to begin. Who do you pick to be your successor? How do you train them? Do you plunge them directly into the business, let them work their way up or keep them with you 24/7? Here are a few ideas:
Finding a Successor: When you choose a successor, try to follow the same steps you would, when you hire someone new. Make up a list of duties and requirements, conduct interviews and then choose a candidate. Even if you’re thinking about training one of your children, it doesn’t hurt to go through these steps so that they understand what’s required of them.
Evaluating Strengths and Weaknesses
Think about whether that person will be a good successor. It’s easy to get carried away with enthusiasm when you’re hoping that one of your children will take over from you. But it’s always best to be clear about their strengths and weaknesses when it comes to running a business. Often times, simply liking or getting along with someone can cloud our judgment as to whether or not colleagues are the best choice for their job.
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