There comes a time to us all when we think about retirement, or stepping down from a business – and the hardest thing can often be finding the right person to replace those at the top. If this is your own business that you’ve created from the ground up this handover can be even trickier. If this applies to you, here are our five top tips for an efficient succession planning strategy.
Yes, it sounds simple, but it might surprise you that 1 in 4 SMEs don’t have any business plan in place and that 49% have no succession plan. Having a solid strategy will help guide you through each stage of the process, outline goals and achievements as well as establish measurables that can be easily monitored along the way.
Family firms are ambitious and want to grow in order to ensure the long-term success of their business – however, according to research by PWC, 43% of family firms have no succession plan in place. Starting early will ensure that everyone is on the same page and it will leave you plenty of time to make adjustments along the way. Delaying the thought process can actually lead to a disorganised handover, when actually a well-thought out transaction can run very smoothly. Ideally, you should be thinking about succession planning around 10 years before the plan is put into action.
Harness employee expertise
All of your employees will become vital assets in succession management. You should be thinking of ways you can develop your more junior members of staff and harnessing the expertise of your senior workers. Don’t assume succession planning is simply a matter of people stepping up or stepping down – support your staff into new roles where required and include them in any changeover plans.
Be prepared – it won’t be easy
If you are handing over your business to another member of the family, it can be an exciting time – but it can also be a bit fraught and rarely simple. It’s not just negotiating any family matters, but things like age can be an issue too. There have been instances where parents in their 50s are planning retirement, but their two children are still at school. In which case, it can be difficult to predict what the future may hold. Children may also have their own interests and ambitions – and these will need to be considered as part of the succession plan as it could determine whether or not you hand over to a family member at all.
Keep it simple – and learn to let go
That sounds like two things, but they do link together. If you can learn to be objective about your business and set new, simple goals to take it forward, then this will help you to keep a clear road ahead.
If you would like some advice about succession planning for your business, then contact DMH Stallard to see how we can help.