Are you a business owner who tends to put long-term planning to the side?
If you answered yes, you’re not alone.
Many business owners generally place planning to the side because they are bombarded with day-to-day management of the business. They focus on the short term because that’s what they can see unfolding in front of them.
In fact, according to statistics from a study conducted by Bankwest, only one in four Western Australian business owners have a succession plan in place, which is ludicrous given the many benefits it can provide.
Succession planning is used to identify those who can take on the role of current leaders in the business if those leaders retire, resign or at worst, pass away.
A succession plan, much like a strategic plan, helps to set your business up for the future and can prepare you for the following:
- If you’re selling your business;
a succession plan opens up the market to passive investors i.e. those who don’t want to run the business themselves.
- If you’re retiring or passing the business onto the next generation in your family;
a succession plan will provide you with added confidence in knowing that the business will stay on the right track.
- Lastly, if you have a key staff member who leaves unexpectedly or has health issues;
it’s important that you have someone who is capable of taking on their role to provide continuity in running the business.
Having a succession plan creates added benefits for businesses because it reduces operational risk and provides certainty for employees, financiers and customers.
If you are a business owner who doesn’t currently have a succession plan, why not put it on your “to do” list. You will be surprised at what you learn about your business in the process of preparing it.
If you would like to know more please contact your Ledge Finance Executive today or contact us here.