Running a small business may not be everything you imagined. Company ownership requires a massive time commitment, eternal promotion, and top-level leadership. While starting a business may be the objective of many enthusiastic entrepreneurs, running a small business may not be on the ultimate career plan. When a business is running at full speed and at full efficiency, that may be the time that some entrepreneurs consider succession planning.
The Most Common Reasons for Succession Planning
Succession planning, as explained in this article and this one, is the systematic implementation of establishing and transitioning new leadership, which can happen for a number of reasons. Here are the most common:
- First-Time Entrepreneurs – Some first-time entrepreneurs are so involved with their business idea that they don’t see the weaknesses of their leadership. It is easy to assume that no one cares as much as you or has more passion for your business idea. However, that doesn’t mean that you are the best match or even the best interest for running a small business.
- Plateau of Business Activity – After successfully starting a business from scratch and building it into a smoothly operating company, you may find that running a small business has reached a plateau and is not seeing any further growth.
- Starting is More Fun that Running – Some entrepreneurs find that the energy, adventure, and challenge of starting and building a business provides more rewards than actually running a small business.
- Skill as a Business – Many entrepreneurs start their own company because they are very good at what they do, be it accounting, baking, sewing, you name it. However, the actual activities required for running a small business is overwhelming, and the owner wishes to get back to doing what they enjoy most – their skill or craft.
- Too Time-Consuming – Some small business owners find that the job of business owner is much more time consuming than they imagined. They may have started the business as a part-time venture, or have other obligations that doesn’t allow them the full time capacity necessary to running a small business.
- Owner Gets Sick – Lastly, what if you were to become unavailable to run the company due to sickness, injury, or worse? Is your team ready to carry the company forward based on your goals and plans?
Forming a Succession Plan
Succession planning is a good idea if the small business owner fits into one of the above categories. The purpose of that plan is to either pave the path for a current top management to take over, or hire a new and experienced individual who can come in and take the reins.
Form Discussions with Staff
If you feel that there is one person on your current management team that is capable of operating the company as well or better than you, hold meetings with your staff to lay out your feelings and succession plans. First of all, if you do plan to go separate directions, your management team should know about it with as much lead time as possible.
Approach your chosen successor and make sure he or she is up to taking the job of running a small business. If that person is open and acceptable to the challenge, lay out a plan to get the ball moving on a start date, and determine how long the transition will be before you actually step down. There will likely be some time where you show your successor your processes, and you will want to observe them performing the duties of big cheese.
Next, tell your management about your plans. Share with them the transition plan and what to expect. Be sure to ask if they have any questions or concerns and address them as best you can.
Succession Planning Talent Search
In many cases of succession planning, the obvious choice will be to hire a new leader from the outside. Again, be sure you talk to your management team about your plans to leave and your intention for someone else to take over.
There are plenty of experienced individuals who have gained expert status from running a small business of their own, or even from the corporate world. The best way to find the right candidate is to ask around. Get the buzz through your network of contacts, and if that doesn’t turn up the right candidate, post for a job in trade magazines.
Before hiring, be sure to do a thorough background and resume check, and conduct a lengthy interview. Succession planning requires more than an hour interview. Take the time to have a long discussion, walk them around your business, introduce candidates to your workers, etc. You want a good feeling about the person who takes over company, so take the time to find the right person who will move the company forward.