Benjamin Franklin is credited with saying, “If you fail to plan, you are planning to fail”. That especially holds true for business owners. Unless you have a succession plan in place, you may be setting your company up to fail after you leave.
Here is why it is essential that you make succession planning a part of your estate plan.
Why is succession planning so important
The long-term success of organizations depends on training qualified candidates to fulfill high-level positions. The process involves:
- Identifying key roles
- Assessing current internal talent
- Scouting external talent pools
- Training potential successors
Proper planning ensures that there is continuity in leadership. It fosters career development while helping prepare established leaders to transition out of their current roles smoothly. It also minimizes disruptions for employees, customers and suppliers.
The lack of a plan can lead to significant financial losses due to the potential of mismanaged resources and a lack of direction in times of uncertainty. It can also cause legal predicaments, as it may be difficult to determine ownership or rightful legitimacy in certain situations. It could also cause gaps in leadership, lengthy downtime and loss of profits during the transition period.
Taking the time to proactively plan for your company’s future is very important. Having an estate plan that includes succession planning can bring peace of mind knowing that everything is taken care of for the future. They help ensure that your family, assets, and business are protected and prepared for whatever circumstances may arise in the future.