SMEs benefit from succession planning reviews

Most business operators are too busy with day-to-day activities to give much thought to planning succession within their business.

However, succession is important as it covers virtually every position in an organisation, not just the owner or CEO.

Let us start with the team…

Australia’s unemployment rate is currently 3.75%. A slight increase from the 3.5% level which was the lowest unemployment rate for 40 years.

Many businesses are complaining about the problems they are experiencing in attracting and retaining talented people.

A strategy that some businesses are implementing is to ensure that there is ongoing training and development activities being conducted for the team members on a regular basis – say monthly. This assists in training people who are already in your organisation, to understand how the business operates, the customers and the firm’s vision.

So the first part of succession planning starts with your current team.

Obviously, there are many components of succession planning that relate to the owner or CEO.  Some of the issues to be considered include:

• The strategic plan which covers the situation if the owner or CEO is not available.
• Is the business a family business? If so, is there a “Business Advisory Board” or has a “Family Charter” been established for this business?
• Are there or should there be “Shareholders Agreements” in place which document various agreements that have been reached verbally?
• Are you planning to sell the business? Will an important component be the capability of the leadership team who assist the new owners? Does the leadership team need some extra professional development training?
• How successful could the business operate if the owner or CEO was no longer involved?

Succession planning affects a wide range of areas within a business. It is a good idea to review them periodically.

The ESS Small Business team, led by Peter Towers – an experienced accounting consultant – can assist you to develop succession planning strategies.

If you would like more information, please visit www.esssmallbusiness.com.au. Alternatively, contact us on 1800 232 088 or email peter@essbiztools.com.au for a complimentary zoom meeting.