SMES: Ensure business continuity with a succession plan

A BUSINESS plan is a road map outlining plans to run and grow enterprises. It is therefore crucial for businesses to have a succession plan in place to safeguard the future when the owner or founder steps down, or starts playing a less active role in the day-to-day operations; it is about identifying a suitable successor to keep the business on an upwards trajectory. As business is mostly about passion and lifeblood, most entrepreneurs hardly think of a succession plan, but it is important to ensure the continuation of a business. Here are points to consider when developing such a plan.

TIMELINE

Decide on a target date for when you plan to step down as the active driver of the business and work backwards from there. Having a clear timeline of your involvement in the business (or lack thereof) will assist in creating an effective, realistic and actionable plan.

SKILL SET

An important step in the development of the succession plan is mapping out the skills and capabilities needed for a successor. For example, what are the key characteristics required to continue the business developing at the current pace? Possible candidates should also share the same principles, values and passion for the business.

ROLES

A suitable candidate may be someone who is already a part of the company, a family member, or a new hire altogether. However, it is not only important to find the right person to take over and run the business, but also to map out other roles that may become necessary as the business grows. For example, which managerial roles will need to be filled to provide the necessary support to the successor?

MENTORING

To ensure that the chosen successor is ready to take over the business in future, it is essential to work closely with the candidate and provide the required mentorship and coaching. In order to properly equip the candidate, be as transparent as possible on how the business is run, and encourage input on decision making. Should you plan to pass the business on to your child, it’s important to note that entrepreneurial talent within the family needs to be identified and nurtured from an early age. This could provide the best possible chance of success in running the business in the future. Although these pointers should help map the way forward, ultimately the most important part of the plan is the outcome, which is ensuring that you leave a legacy and a business that can grow and succeed into the future through your long-term vision.