Building up a business can be a lifelong pursuit. Many people put their heart and soul into creating a business and watching it grow from a concept into a successful and productive enterprise. Sometimes a business is the passion of one individual and sometimes it’s a family effort. Every business has a different story, and each story has different chapters. Life changes, businesses change and people come and go from a business. These changes can be stressful, but they don’t need to mean the end of an era. When it comes time to end one chapter and begin the next, succession planning comes into play.
What is Succession Planning?
Succession refers to the process of transferring power or leadership from one person to the next (the successor). It happens in nearly any situation where formal leadership plays a significant role. Royal families have fought wars over succession rights. Fortunately, your businesses’ transfer of authority doesn’t need to be nearly that chaotic. When it becomes obvious that a change in leadership will be necessary, due to retirement, a change in business ideals or another situation, it’s time to plan for a smooth transfer of power.
Why Have A Plan?
No matter how well a business is built, change is a constant that cannot be ignored. When the leader of a business retires, or moves on to found another business that change is predictable and succession planning is relatively easy. However, some changes aren’t so easy to see coming. In the event of a current leader’s sudden illness or death, it’s vital to have a plan in place to ensure that the company can continue to operate despite this unexpected and harrowing change. Dealing with illness, death and other unplanned and unfortunate events can make it difficult to think clearly if a solid and functional plan isn’t in place.
How to Have The Best Plan
Even when a leader knows what he or she wants for the future of a business, implementing a plan isn’t something that one does every day. That’s when it’s helpful to contact an accountant or an accounting firm with expertise in succession planning. They can help you put a plan in place that accounts for every possible eventuality. If the change is intentional, they can help to make certain that a leader can leave with the knowledge that the business is thriving. They can also help to formulate a permanent plan to have in place in the event of a sudden or traumatic change.
Focus on the Now
Succession planning is geared toward the future but it is designed to help a business run smoothly in the present. Uncertainty is a normal part of life, but a solid plan made by experts who understand the ins and outs of business power transfer can help to minimize that uncertainty. Contacting an accounting firm about formulating a plan to cover all eventualities is one of the smartest moves a business owner can make, because it allows everyone to focus on the day-to-day running of the company.