As an entrepreneur, its imperative to consider succession planning when running your business. The succession plan, clearly defines the role of the successor, the company’s mission and vision, financial details and how equity in the business will be divided. Here are some points to guide you when planning.
- PLAN AHEAD: Here are some critical questions to be asked.
• What happens when there is a shift in focus or change in direction?
• Is there a competent person to replace the owner when s/he is no more or unavailable?
• Is there an exit strategy for the business and how would that be implemented?
When these questions are thoroughly answered, it can assist with the planning process.
- CHOOSE A SUCCESSOR: This is sometimes tricky. Ideally, the person should be someone who already understands the business model and brand. The role of the successor must be clearly defined and explained. The person must have shown some level of commitment to the business.
- COMMUNICATE THE PLAN: It is important that the owner communicates the thorough plan to people who play a key role in the organization. It is also important to introduce the successor to key clients if not all your clients.
- BUILD SUPPORT STAFF: It is imperative not to only train a successor but you need to also build a strong team to support the successor. During the transition period, it is advisable to work with the chosen successor to identify some employees to be promoted to management or new roles. Allow the successor to announce the management changes at the end of the transition as a sign to all stakeholders that s/he is in control and is also empowered to make important decisions.
- PUTTING YOUR FINANCES IN ORDER: A good succession plan must include an analysis of current finances and a five to ten years financial plan. The successor must have accurate financial information about the organization.