Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. Also known as "replacement planning," it ensures that businesses continue to run smoothly after a company's most important people move on to new opportunities, retire, or pass away. Succession planning can also provide a liquidity event enabling the transfer of ownership in a going concern to rising employees. Succession planning is not a one-time event; succession plans should be reevaluated and potentially updated each year or as changes in the company dictate.
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How to Write a Family Business Succession Plan
For those of us running family businesses, the holidays remind us of the many blessings that entrepreneurship affords us. Running a family business can be daunting, frustrating and rewarding at the same time. Among the most difficult discussions for any entrepreneur to have with his or her family is succession planning. Yet, such an engaged discussion is like a gift one can give to their children, siblings and employees. There are 27 million closely-held businesses in the U. Only about a third of family businesses make it to the second generation, and even fewer about 12 percent make it to a third.
What is succession planning? A key talent strategy for business
This template provides an outline for creating an emergency succession plan to help ensure a smooth transition when an unexpected leadership change occurs. Use the template to develop your own strategic plan for how to handle the temporary or unexpected absence of an executive director or similar role. Identify the key responsibilities of the role that need to be maintained, plans for interim or other hiring options, and procedures for implementing the emergency plan. Watch the demo to see how you can more effectively manage your team, projects, and processes with real-time work management in Smartsheet.
You may be thinking about retiring or leaving your business. Business succession planning can help you preserve your wishes once you are no longer involved. Begin your business succession planning by looking at the governing documents of your business and making changes to include your specific wishes for what happens if you no longer run the business. Each business type except for a sole proprietor business has its own documents.