Nearly all businesses need to think about a succession plan at some point. This could involve a large corporation looking forward to having the right leaders for the future, or it could refer to a small dental practice that will sell its assets upon the retirement of the dentist.
In most scenarios, the principles of a successful plan involve many similar characteristics.
The essentials of sound planning
Kiplinger reports that succession planning remains one of the most neglected aspects of business ownership. The goals of a plan vary, but they generally include identifying what is essential to keep a business running during challenging times. A plan might also focus on passing along the business to another party.
Key elements of a continuity plan often involve industry-specific details. In general, though, a sound plan will include some or all of these elements:
- An analysis of key personnel
- A review of facilities and equipment
- A look at managing and securing data
- An assessment of the supply chain
The initial stages of a plan involve getting input from key employees, suppliers, vendors and clients. In a small company, it could mean speaking to just a couple of employees who keep an office running.
The importance of a smooth transition
In some cases, a business succession plan really means preparing for the retirement of a single key person. This is often seen in small professional offices such as a doctor or dentist. A business with a plan is likely to have more value for a buyer, who wishes for an orderly transition. A plan can also avoid the stress and drama of an emergency succession.