As the owner or executive of a successful small or medium-sized business, you have a lot of responsibilities that demand your attention. It is very easy for busy professionals to procrastinate when it comes to planning for long-term needs, and perhaps the most overlooked long-term necessity is creating a succession plan for their role at a company.
Unforeseen events could have a significant impact on your company’s daily operations, and could cause the dissolution of your business. A succession plan helps keep the business you have invested so much in operational regardless of what happens to you. How do you begin the process of planning for your company’s future without you?
Create a Comprehensive Outline of Your Role and Responsibilities
One of the most important early steps in succession planning involves identifying your job responsibilities, especially any functions not already included in training documents. Additionally, you need to think about what information only you know and create a secure file or list for your successor to utilize. It is also important to have a record of the vendors, contracts, and accounts you are responsible for so they can be identified and accessed in the event you are unable to do so.
Ideally, you can provide such thorough instructions that someone with the right skills could start performing your job without missing any key tasks based solely on the documents you created.
Identify Candidates and Discuss What Has Made You Successful
For many companies, an important part of the succession planning process involves naming a specific individual as a successor, or outlining how to go about naming one. It may be helpful to provide information about what education or professional experience has been necessary for you to do your job. You could also provide a list of training opportunities that would help the right individual secure the necessary skills to perform your job.
Outline Short-Term and Long-Term Plans
Succession plans should also include a timeline of the company’s major projects and likely growth for the next five years, and possibly longer. When you achieve certain goals or make changes to how your company operates, you may need to revisit your succession plan to make sure it is up-to-date and contains accurate information about the company’s circumstances and how you do your job.
Once you have a thorough breakdown of your job responsibilities and ideas about succession, you will be ready to start the process of creating a formal succession plan. If you are a business owner, you may also need to address the company’s ownership carefully in your personal estate plan. Thinking about the future of your company can help you see the value of creating a succession plan to ensure smooth operations regardless of what happens to you.
While the above tips will get you started, a comprehensive Succession Plan requires time and attention to get right. The attorneys at Gudeman & Associates can help you prepare your Succession Plan, as well as many other services for new and existing Michigan business owners. Contact us today to schedule a free 30-minute consultation.