Protect your SME with a robust succession plan

Protect your SME with a robust succession plan

When you are running a successful business, the last thing you want to think about is leaving, however since no-one can predict the future, an exit plan makes good business sense. 

If you look at the reality of the situation, you might need to leave for health reasons or you might simply decide to retire, handing over the reins to a family member, current colleague or even selling outright.

Whatever reason you may have to leave your business in the future, foremost in your mind is usually a fervent wish that your business continues to be a success, even without you at the helm. The problem is – how do you steer your company when you are no longer there?

Succession planning for SMEs

The solution is to organise a succession, or exit plan as it’s sometimes called, which outlines who will take over your business when you leave. A strategic succession plan will make the transition between yourself and the new owner smooth and uncomplicated, maximising the value of your business and ensuring that your business is positioned well for the future.

Unfortunately, many business owners don’t give any or little thought to succession planning, leaving them without any clear strategy to transition between owners. This lack of forethought can place their business in a very vulnerable position, until the new owner is finally able to grasp the helm themselves. 

Who should step into your shoes?

Starting to think about where you see your business in the future, ignore the “who should take over” step and focus on where the business needs to get too and what qualities in a person do you need to make sure you get it there.  

For example, having the right employees in your company makes great grounds for the right qualities for your ideal successor. You might be considering handing over your business to a relative, however If that person doesn’t have the right set of qualities to run your company, you will be putting your business in jeopardy. 

Over time as your business develops, you may change direction or take advantage of new technologies. Therefore ensure your future of your business is at the forefront of your mind.

Once your ready to put your thoughts into actions and actually look for your successor, make sure that everyone knows that you will be leaving. This gives everyone sufficient time to become used to the idea and accept that you will be handing over the reins to someone new. If you try to keep your leaving a secret, you may find that key staff become disgruntled and may leave, jeopardising the value of your business and placing the transition at risk.

This is the point where your plan becomes extremely useful, because you may decide that a senior member of your staff is highly suitable to fill your shoes, or you might realise that none of them have the right combination of skills. In this case, knowing your plan will help you select the right candidate to ensure a smooth transition, keeping your business employees happy, who will in return, keep your customers happy.  

To speak to an insurance specialist about your business needs, talk to an insurance specialist today.

General Advice Warning
The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

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