A business is only as strong as its leadership. As someone who serves as the executive or owner-operator of a successful company, you understand how important your role is for the company’s success.
You may have dozens of employees that rely on you to make the right choices for the company’s future. They would likely prefer to have job security that doesn’t directly relate to your continued ownership of the company.
Unfortunately, you never know when a car crash or a medical emergency might leave you unable to continue running your business. Creating a succession plan may be the only way for you to protect your workers and your company’s future in that scenario.
What is a succession plan?
Succession plans are written documents created by executives and owners to ensure the continuity of business operations. Some succession plans may include details about how someone does their job or records of information that they are the only ones to know. Other times, succession plans focus more on the necessary criteria for hiring a replacement.
Your succession plan might include a description of your frequent obligations, a collection of information your successor will need and a list of suggested candidates or necessary traits for the hiring committee that replaces you. A good succession plan will help ensure not only that the company can replace you but that the person who takes over your role when you leave the company will have an easy time assuming that role and managing the business.
Developing a succession plan is important when you start a company or when you start planning for your retirement, and it may dovetail with your personal estate plan to transfer ownership of the business upon your death or incapacitation.