Make sure your business has this in place before disaster strikes
Do you remember our client, Julie?
She’s a smart business owner that came to me for help creating her succession plan so that she could exit her business within the next 3-5 years. Smart because she came to me years, not months, before wanting to exit her business.
While creating her succession plan, Julie needed to navigate the area where finance and HR intersect that is usually neglected by business owners.
Obviously, this requires some planning and that planning starts with your succession plan.
Your succession plan gives you a big picture. It’s initially for the owner, but a good plan goes deeper into the organization to the folks that keep your business running smoothly on a daily basis. You need this succession plan for executive level positions as well as every other position in your organization.
Your succession plan benefits your business NOW by:
• Building strong leadership within the organization
• Navigating the “Ups” and “Downs” of the marketplace
• Forcing a level of discipline within the organization
Another area that needs to be accounted for in your plan is how you are going to handle any potential disasters. You wouldn’t repair your roof in the middle of a rainstorm, would you? The same goes for preparing your business for disasters. They happen, and not always on your timeline, so the time to plan for them is now.
You need to identify and put in place a series of contingency plans to keep your company afloat in case of:
• Natural disaster – What steps will your business need to take if a natural disaster were to strike your area?
• Illness – People get sick, and your business needs to plan for that.
• Key employee retirement – You want to retire and so do your employees. Getting plans in place lets key employees retire without putting a burden on the organization.
• Other unforeseen situations
What does this part of the plan look like?
Having backups in place and cross-training all year, every year. Having written contingency plans that have been communicated throughout the organization.
Can you imagine how your business would grind to a halt if the people who keep your business running smoothly every day didn’t know what to do when disaster strikes?
Which brings me back to Julie and her next steps.
Julie needs to cascade her succession planning down into the organization so that everything is tied together cohesively and consistently with the goals and objectives of the organization.
As part of Julie’s contingency plan, she created a job description for the hiring of a key position. She began reviewing candidates and consulted our team on salary, the perks, and many other compensation questions that she had surrounding this position.
Together, we were able to include the cost of this new hire in her budget ensuring that the company could afford the addition of the new position. We tested this before firming up the budget for the year.
The addition of the new position provided Julie’s company with the necessary backup for many key positions in her organization and accounted for many of the potential disasters listed above.
Do you have contingency plans in place or are they just in your head? Could your business sustain the loss of a key employee and not miss a beat? Are there any gaps in your current succession plan?
If there are, call me and let’s work out a plan to close those gaps and keep your business running smoothly.