Do You Have a Succession Plan In Place?

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?

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?

Although natural disasters are the most obvious and dramatic, such as Hurricane Katrina or Hurricane Gustav or the burning fires in Southern California or the deadly floods of the Midwest, companies should be prepared to resume business after a natural disaster, theft or the loss of a key manager.

Do you have a succession plan? A succession plan policy is a tool to help an organization prepare for planned or unplanned absences of the director, clarifying authority and decision-making and 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. Failure to have a succession plan in place can cause monetary loss or worse, the loss of your business.

Succession planning includes:
Choosing your successor – this can be a key employee or a family member

Create a formal training plan – 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

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.

After Hurricane Katrina catastrophe, I talked to several small business owners who lost their entire business; customer records, equipment, inventory and property. To make matters worse, some of them didn’t have their computer files backed up or a plan to relocate to a temporary facility so that their business would resume to some degrees. This was devastating! A local business owner died suddenly and neither his wife nor employees had a clue of how to run the business. Don’t be caught without a succession plan!

To learn more about creating a succession plan, read, ‘Succession Planning 101.’