Often the small business owner is embedded in the business and does not take the opportunity to step back and plan the future. Succession planning is planning the future to protect the quality of your business service. With a plan, you will be better prepared to deal with unexpected events that happen both to your employees and yourself.
A business owner needs to develop a succession plan using the current employees on the organization chart. One of the first steps is to decide who is ready now to step into a promotion and who needs additional training. For those ready to step up now, when might that opening happen? When there is little likelihood of a vacancy, there is a risk the employee may look elsewhere. One strategy you might use is to meet with staff that are ready to move up but for whom no opportunity exists at this time. Perhaps there is an area of the business where the employee might wish to work to expand their experience and future opportunities.
Designing succession plans in isolation from the employees is risky. Employees are a curious lot and want to know what opportunities exist and how well they fit in. While sharing succession plans raises the expectations of promotions, it can also help retain employees. When employees are involved they will understand how they can impact their own future through training which leads to vacation relief and possibly a promotion. A three-year time horizon is a realistic schedule that allows time to move people into new positions, and provides time for learning to occur.
Succession plans need to be reviewed regularly to recognize training that has happened and to schedule training that needs to happen. Similar to a business plan, succession planning has a long-term horizon that can be implemented in the short-term due to the careful consideration that has been made.
Succession planning will help you organize your thoughts for that day in the future when you too have decided to sell your business. There is no harm in planning that early.