It may be hard to fathom the reality of selling your business. You had a goal to grow and build your business, and over years of work, your energy, your vision, your customers, based on your value stream, is now realized after years of working towards that expected goal. A succession plan is vital when you have decided that it is time to exit your business, and move on to your next life adventure.
Have you planned how your dream will succeed without your ingenuity and magic touch or even the input from critical personal? For many small businesses, succession planning is only a wish list at the forefront of business owners’ minds but on the outskirts of actionable plans. Removing oneself from the day to day nuances of the business to having comfort in knowing that the company will sustain profitability in the event of retirement or leave. It is a plan that takes critical thought to divest the owners’ mentality in working on the business instead of for the company. Succession planning is vital in the current scenario of tight talent market management. It is a strategy in transitioning essential functions and roles to employees having standby reinforcement. You built it now; it’s for them to keep it. Succession Planning consist of identification of the following for a specific outcome:
1. Key positions and status (Critical, Impending, & Potential Vacancies). Knowing what roles are vital for backup is essential in maintaining strength and focus on operating the business successfully.
2. Potential Successor is where talent management comes into play, identifying relevant knowledge, skills, and abilities.
3. The timeframe of the leave status of key individuals ensures the framework for which plans need to be implemented. This allows an opportunity to strategize their retention potential and mobility transfer potential of identified potential successors.
4. Gap analysis which defines the competencies required to perform specific role functions to include leadership and behavioral identification skills that are needed for senior positions.
5. Training requirements, either internal or external, brace the company for success. Training, although costly, is an investment in the future of your business and is critical to the future success of your company. Ongoing employee training helps develop employees and increase their experience by engaging in challenging duties, which in turn helps to build loyalty to the business. Employees need to be productive, efficient, exceed standards. While adapting to improve skills in several areas, including communication, critical thinking, and problem-solving.
In so doing, you will well-position the employees who will assume new roles or functions. It brings focus to the process of identifying critical attributes of your business and addressing weaknesses found in individuals that will be considering those functions. Strengthening talent has a direct impact on bottom-line results and contributes to organizational growth. It is an opportunity to help employees learn new skills for development, targeting strength, and ensure greater worker engagement. Hence development at talent level is a must for overall organizational growth.
When you decide to exit your business, it is important to have a succession plan. Succession Planning will make the transition of ownership flow more smoothly for your employees, existing customers, family, and yourself.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
Cogent Analytics, LLC is a business management consulting firm, with a primary focus to help small to medium size, privately held businesses achieve success and long term profitability. Cogent provides powerful solutions with integrity and transparency to privately-held businesses throughout the United States.