While the business journey is still on, it is not unusual for a business owner to decide that it’s time to take a back seat and let the next generation take over the role he has successfully run for so many years. This process called succession planning is not as simple as it may seem as passing on the role to the next generation and identifying as to who will be the most fit-out of several choices to succeed in one or several positions require good judgment, understanding, and a lot of decision making.
Business succession planning is concerned with the planning to pass on leadership roles; certainly the ownership of the business. Business succession planning, in simpler terms, is to figure out who will take charge of the business upon retirement, death, or in the case of inability to precisely control or manage the affairs of the business. As the main player decides to opt-out of the business, taking an exit route, the strategic planning process kicks in with the ultimate objective of identifying and developing a future leader/leaders of the business.
This may not only include the top panel but also people working across major roles at all levels of management. Business succession planning ensures that the business continues to run efficiently after the company’s most influential people move on to new business opportunities, retire or die. It also prepares businesses for uncertainties and uplifts high-potential employees, to advancement.
Succession planning may also serve as a valuable tool to deal with unforeseen and unexpected scenarios at times. Effective and timely succession planning can also pave the way for the continuity of the business, so it plays a critical role in the business’s strategic planning. Succession planning is crucial and especially a matter of great importance for small to medium-sized businesses and family-owned businesses. The aim is to favor every stakeholder, be it the departing owner, the successor, or the employees. This process of succession planning involves taking a series of steps to reach the goal.