Posted by Robert Half Management Resources on Friday, January 30, 2015 - 11:24 | Follow me
If you’re like most small business owners, you’ve probably poured blood, sweat and tears into building your firm. It may have taken you years or even decades to get your business to where it is today.
But, if you’re also like the majority of financial executives, there’s one thing you may not have considered yet: succession planning. A Robert Half Management Resources survey found more than three-quarters of chief financial officers had yet to identify a successor.
Have you determined who will take over your small business when you retire? If you had to step down due to illness or another issue, would your management team know how to carry on the business?
If you answered no, you’re not alone. Here are three steps to help you start successful small business succession planning:
1. Choose the right successor.
It’s easier said than done to select the right person to take over your job. This challenging staff management process can be especially difficult for family-owned firms, particularly if the owner must choose between multiple children or other relatives to take over the business.
This isn’t a decision you should attempt to make overnight. Choosing the right successor should be a lengthy, thought-out process, and it’s important to start planning early.
Be sure to consider and evaluate all of your employees, especially those who demonstrate strength in leadership. If you’re still having trouble choosing the right person, ask your board of directors to offer an opinion, or consider creating a successor search committee. This can help you remain objective and remove some of the emotion from the selection process.
2. Don’t limit your candidates.
Some business leaders make the mistake of selecting only one successor. However, it’s critical to choose and groom more than one candidate. Things change, and your top choice may be unable or unwilling to take the job when the time comes.
3. Get started grooming.
Once you select your potential successors, develop a formal training program for them. During this process, let your future replacements shadow you, and give them an opportunity to work in every department or area of your business.
Whatever you do, don’t micromanage. Though you’ll want your successor to maintain the overall vision and culture of the business, you have to give him or her enough space and freedom to handle things his or her own unique way.
If you haven’t started your small business succession planning yet, it’s time to get going. In fact, experts say business owners should begin succession planning at least five to 10 years before they plan to retire.
Do you have a formal succession plan for your small business? Share your comments below.