A succession plan is a key aspect of any business strategy and requires some considerable thought. Here’s 3 tips to consider for your business:
1. Plan for succession now, not later
It is never too early in the life-cycle of your business to have a succession plan in place. In an ideal world you will know well in advance when a senior team member is leaving the company (i.e. a planned retirement) however, this isn’t always the case. Losing a colleague unexpectedly could affect a lot of people and impact the underlying success of the business.
2. Know your goals
Your business goals should be a central part of your succession plan and the long-term strategy of the business.
Questions you should be asking yourself include:
• Will the business continue without you?
• Do you want to exit the company completely?
• Will someone internally take over the reins from you? And, if so, who will replace them in their role?
• What’s your retirement plan – a gradual reducing of your involvement, or an immediate stepping away from the business?
3. Continually update and refine
The next 12 months is uncertain to say the least. Therefore it’s imperative to think through your business aims and whether these have changed in light of the threats that COVID-19 and Brexit have posed to your business.
Even if the pandemic has had a positive effect on your business, your strategy is still likely to have altered. For instance, if your company has grown, and new senior team members have been brought in, then this may affect who you now see taking over the business. If it’s a negative impact, you may have to work for longer and retire later than you previously planned.
If you’re looking to create or update your succession plan, contact one of our Corporate Finance advisers on 01788 539000.
Check out more of our blog articles here: www.magma.co.uk/blog.