No matter the size or maturity of an organization, business owners must be aware of the importance of developing a strong succession plan. The succession plan helps owners identify skill gaps, hiring needs or the training that is necessary to ensure the continued success of the business.
Even though every business is unique, there are numerous mistakes that can leave an organization unprepared for the future and facing potentially devastating errors in judgment. Here are three succession planning mistakes business owners must avoid:
- Assuming a career path: While you might have known your trusted employees for years, you might not fully grasp their future goals. When developing your succession plan, you might slot a certain individual into a key management role that he or she has no interest in pursuing. It is wise to include these employees in the decision-making process to ensure your understanding of their goals matches your own plan for the future of the organization.
- Failing to plan for ongoing training: In many ways, the business succession plan must remain a living document for owners to revise at regular intervals. Whether this means a change in strategy or an update to a skillset, room must be made in the plan to account for certain workers improving in deficient areas. This can include performance reviews, seminars, education or ongoing training.
- Failing to tie the succession plan to the estate plan: While many business owners strive to keep their personal and professional lives separate, it is more often the case that the two are intertwined. Whether it is strictly a family business or certain heirs believe they can grow the company after your passing, it is wise to include certain language in the estate plan that links the document to the business succession plan that is already in place. This can help your surviving heirs avoid unnecessary disputes and present a unified front to strengthen company morale after your passing.
Depending on the size or scope of the organization, business succession planning can be a complex endeavor. It is wise for business owners to take the time to carefully plan both their end of life wishes and the future success of the company.