Posted by Dave Lorenzo - Business Coach

Entrepreneurs spend a good deal of time working on the day-to-day aspects of their business.  It is often difficult for them to spend time thinking about and planning for the future.   When they do take the time to write something down it is often a short term plan for achieving sales goals. Although I celebrate anytime a small business owner sets time aside to think about the future, there is one type of plan they should move to the top of the list. Every small business needs a succession plan.

It is critical that a business owner take the time to figure out how the business will continue on if something happens to him/her.  I counsel all my clients to have three different types of succession plans in place not only to make certain that their legacy continues but also to continue to serve their customers.  The three types of succession plans are:

Emergency Plan – This is a plan to keep the business operating for the immediate three months following the death of an owner.  Three months gives the owner’s partners or family an opportunity to catch their breath and figure out what to do next. What happens tomorrow if the business owner gets hit by a bus?  Who takes over?  What do they need to know?  What should they do in their first 30, 60 and 90 days?

Prepare and Sell Succession Plan – If the partners or family decide to sell the business, this plan details how the current owner would recommend they go about it.  All of the details of the business’s assets and financial agreements should be included with this plan. 

Legacy Succession Plan – This plan outlines how the business owner recommend that the business move forward without him/her.  This should be a forward looking document that is updated at least twice a year.   

Now this may seem like a little too much detail but believe me you’ll sleep better knowing that your business is protected.

For more on this topic check out the article from the Wall Street Journal titled Small Talk.

Technorati tags: career intensity, succession planning

Filed under: Entrepreneurship - Success
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1. […] Succession Planning is Important for Small BusinessEntrepreneurs spend a good deal of time working on the day-to-day aspects of their business. It is often difficult for them to spend time thinking about and planning for the future. When they do take the time to write something down it … […]

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