Business preparedness has never been as important as it is in today’s climate. From access to resources to fulfilling business obligations, business owners have more on their plate than ever before.
While we could not have foreseen the current pandemic nor can we know what is to come next, there are measures you can put in place to ensure the success of your business due to your incapacity, death, or other unavailability.
Business succession is the process of planning the end of your ownership of your business, but also its ability to run without you. The plan itself can include passing on the business to the next generation or selling it to an attractive buyer. It may even include winding up the business to sell off its assets and close permanently. Regardless of your end goal, the planning itself should require you to put systems in place to ensure the continued operation of your business due to your temporary or permanent unavailability.
What Should Business Succession Include
A business succession plan should start with an exit plan that identifies who you want to run the business in the event of your unavailability and what you want on your departure. This could be a key employee or a relative; in the event of an acquisition, it may be a competitor. To ensure a comprehensive plan you should have a plan for a temporary absence as well as a plan for your exit.
Before someone could run your business like you, however, you must also have a set of policies and systems in place that give your successor guidance in the operations of your business. Without this, your business will suffer in the event of a temporary absence, but will also be of less value to potential buyers.
Once you have your systems in place, named a temporary successor, and established a long-term exit plan, you should communicate this plan to family members and key employees so there is a smooth transition in the event of your death, incapacity, or temporary unavailability.
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