You’re open for business, dressed for success and business is good. You’ve planned your company’s day-to-day operations with budgets, flowcharts, key staff and contact lists. You have all the right people in place. But are you really prepared? Have you prepared for crisis management and is there a recovery plan in place? One of the most difficult things to consider is who can fill your shoes if you have to let go of your ‘baby’ whether planned or unexpected.
Although natural disasters are the most obvious and dramatic, such as Hurricanes Katrina and Gustav or the burning fires from the Santa Ana winds in Southern California or the deadly floods of the Midwest; companies should be prepared to resume business after a natural disaster, theft, death, illness or the loss of a key manager. By taking a proactive role in creating a succession plan, ensures that your business have highly qualified people in all positions, not just today or tomorrow, but years from now.
Do you have a succession plan?
A succession plan is a tool to help a business or organization prepare for planned or unexpected absences of the owner or CEO, clarifying authority and decision-making, thereby maintaining accountability and ensuring stability. What steps would you take to transfer the business to a key employee or the next generation? It is a process of determining critical roles within a company. Statistics show that 70% of entrepreneur-owned businesses do not survive the founder. So, failure to have a succession plan in place can cause monetary loss or worse, the loss of your business.
After Hurricane Katrina catastrophe, I consulted with several small business owners who all had devastating losses, which included not only major damage to their personal properties but their entire businesses; customer records, equipment and inventory. To make matters worse, some of them didn’t have their computer files backed up, had no flood insurance or a plan to relocate to a temporary facility so that their businesses could resume to some degrees. This was devastating!
In another case, a local business owner died suddenly and neither his wife nor employees had a clue of how to run the business. He didn’t have written standard operating procedures (SOP) in place or a succession plan. So, consequently, his business died along with his untimely death. Don’t be caught without a succession plan!
Four simple tips to creating a simple succession plan:
Simple Tip #1: Choose your successor – Before doing so, ask yourself, ‘What skills must my successor have?’ This will help you to determine who best can fill your shoes or that of a manager. Often, this is a key employee but smaller companies also name a family member as a successor.
Simple Tip #2: Create a formal training plan – It is important that the successor knows that he/she has been chosen and undergo extensive training to be prepared for this role. When creating a formal training program, consider the critical functions of your business and train your successor in each of those functions to ensure he/she is ready to take on the new responsibility. Also, consider whether the successor has the ability to inspire and motivate employees. The last thing you want is for the successor to take on this new role while the rest of your staff resigns.
Simple Tip #3: Set a timeline – decide when you want to retire and set goals leading to your retirement. If you are in a natural disaster, make sure your plan includes steps to cover this. Make sure that you are involved in the transition period. That could mean spending a few hours per week with your successor or being available to answer various questions for a limited time.
Simple Tip #4: Just let go! – As the founder of a business, this could be the most difficult step to take but very necessary to do! A friend of mine who owned an accounting firm told me that she found herself visiting her former business well after the transition period just to see how the new CEO was doing. After a while, she realized that she needed to let go and let the new CEO run the business.
As a business consultant, I make it a point to advice my clients to plan their succession strategy during the time they write their business plan. It is as important when starting a business to have an exit strategy. To learn more about creating a succession plan, read, www.successionplanning101.com.
WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Sylvia Browder is CEO of Browder Consulting Group, a virtual small business consulting and coaching firm. She is currently employed as a Project Director, business coach and consultant for the Women’s Business Center, Inc., a non-profit economic development organization with a mission of empowering women to start and grow successful businesses. She also serves as a volunteer SCORE counselor, an organization dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. She is also a Technical Assistant Provider for SBA’s Community Express Loan Program. For FREE weekly articles go to Sylvia Browder’s Blog for Women Entrepreneur’s, www.sylviabrowder.com. She can be contacted at firstname.lastname@example.org..
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