Succession planning for small business owners

Succession Planning for Small Business Owners

Do you worry that your business is too dependent on you? In this blog post, I’ll talk about what business owners can do to lighten the load and remove themselves from the daily grind. I’ve helped dozens of leaders with creating succession plans to remove themselves from the day-to-day operations and build a pipeline of future leaders on their team.

First let’s talk about whether this succession planning for small business owners is, in fact, right for you and your business right this second. For most business owners, there are three key reasons they want to spend time on creating a succession plan.

  1. Have an exit plan from their business. 
  2. Create a legacy business that they can pass down to their children
  3. Have a contingency plan for your business in the event you are unable to work in it anymore

There may be other reasons, but in my experience these are the most common. Comment below and tell me which one you most identify with? OR if there are any other reasons.

Ok, so how do you even do a succession plan? Where do you start?

Step 1 – Succession planning for small business owners

Assess all your current employees on three key things:

  1. Aspiration
  2. Engagement
  3. Aptitude

Aspiration is whether or not the employee has the will and desire to take over your job of leading the company. 

Engagement is to what extent the employee is entrenched in your culture. Are they enthusiastic about the company’s products and services and are they an ambassador for the company.

Lastly, Aptitude is whether or not they are able to take over the top job. A person can have the aspiration and the engagement levels to be the next owner of your business, but they may not have the aptitude to ever do the job well.

Step 2 – Succession planning for small business owners

For the employees that you rated high on all aspiration, engagement and aptitude, you’ll need to assess what they need to develop on in order to take over the top job.

Do they need to learn more about a certain aspect of the business? 

Do they need to learn how to acquire customers? Or manage customer service? Or service delivery?

Whatever it is, document it and think about how long it’s going to take for them to get there because that’s going to lead to the next step.

Having a development plan for your high potential employees has the added benefit of retaining this talent because you’re telling them that they’re valued and that they have a future in your business.

Step 3

Once you have the employees’ development plans in place, it’s time to think about how long it will take them to get there. You can slot them into time frames such as “Ready now”, “Ready in 1-2 years” or “Ready in 3-5 years” and “Ready in 5+ years”. I like bucketing people like this because it gives you a great snapshot of where your employees fall on the development scale. For example, if you only have employees who are in the 5+ years bucket and you want to hand over the business in 2 years, then you have some choices to make.

Either you push your timeline out, or you think about hiring someone externally. I’m not a fan of hiring externally for succession planning because it takes a while for people to get really entrenched into your culture, but if that’s what you need to do to do, then so be it.

That’s your 3-step process to create a succession plan

Now, this is a quick version of the succession plan process I use with my clients inside my High Performance Culture Academy program. If you’re ready to take your business to new heights by putting processes in place to maximize the performance and potential of your people, then let’s jump on a call.

I will say this. Succession planning is extremely easy to push off and procrastinate on. The only way I know to ensure that you actually follow the process and get your succession plan done, is to put it on your list of business priorities. I have a really handy goal setting guide that you can download to help you.

You can access the video version of this blog post here.

Alright my friends, that’s it for this week. Be sure to come back next week, same day, same time.

I'd love to hear what you think - leave a comment below

This site uses Akismet to reduce spam. Learn how your comment data is processed.