It’s probably not something you want to think about, but succession planning is an important consideration even in the earliest stages of running a business.
Having a succession plan in place provides you with a backup in case you leave the business for any reason, whether it’s for health reasons or because you want to sell of retire.
A successful plan should include the following:
- when you plan to leave the business
- who will take over the business
- whether the business will be passed on in full or only partially
- buyout or sale details if applicable
- any tax or legal considerations
- supporting business documents
A useful succession plan template and guide can be downloaded from www.business.gov.au.
While there is a lot to consider when working on a succession plan, arguably one of the most considerations is deciding who will take over as your successor. Will it be a family member, a business partner or someone else? And will they be ready to take on the extra responsibility?
It’s important to ask how you’re going to prepare a successor, and indeed this is something that should be considered for every role in your business.
The loss of any employee can have dramatic effects on a business, so you need to offer employees adequate training so that there is someone ready to step into new roles as the business grows and changes.
The benefits of training employees to take over new roles is two-fold – it allows someone to easily step into a role should someone leave the business, and employees become motivated when they have the opportunity to grow and develop into new roles.
You should aim to review your succession plan regularly and keep it up to date should any circumstances change. This will ensure your business can continue to run smoothly should anything happen to you or a key employee.