Good to Great: How to Scale With an Outsourced CFO

Your business represents years of hard work, risk-taking, and collaboration. It deserves to be protected, and creating an effective business succession plan is one of the best ways you can protect it and ensure its legacy.

Life is unpredictable and you never know when the unexpected can strike. Accidents, illness, and personal issues can all derail a business if plans aren’t put in place to manage them. That’s why it’s important to start thinking about business succession now, even if your business is in its early stages of development.

 

When to Do Succession Planning

Generally speaking, the sooner you start your succession planning, the better off you’ll be. There are several reasons to start succession planning as early as possible. First, a well-designed succession plan will encourage you to work hard to establish and grow your business in a way that it will still hold its value after you’re no longer a part of it. In other words, it gives you a clear vision of the business you hope to build, even if you’re not quite there yet.

Second, you never know when you’ll need a successor. In most cases, you’ll have plenty of time to select and develop your successor. This isn’t always the case, however. Since you can’t predict the future, it’s important to cover all of your bases by creating a succession plan that can be ready at a moment’s notice, just in case the unthinkable happens.

 

Why Is Succession Planning Important?

One of the great benefits of succession planning is that it helps key stakeholders to understand how business assets are owned and controlled. A good succession plan provides for flexibility of ownership and changes that come from growth and new leadership. 

Succession planning is especially important when ownership of the business is shared by several people. The plan could allow for the buyout of co-founders under certain circumstances, or it could prevent the business from passing to an unintended beneficiary. There are many options for how a succession plan could work, the key is to have a plan in place so that the value of the business is not affected by the exit of a particular person.

 

Benefits of Succession Planning

It’s impossible to list all of the benefits of stability within your business due to your succession planning, but the following are four important benefits:

1. Uncovered Weakness. Succession planning nearly always uncovers existing weaknesses or blind spots within your business. Once these weaknesses are uncovered, you can address them, and your business will be noticeably stronger.
2. Preparedness. Just as an insurance policy prepares you for unforeseen hazards in the future, a quality business succession plan will make your business better prepared and ready for whatever tomorrow brings.
3. Improved Efficiency. Dedicating time and resources to plan the future of your business now will save you time and money in the years ahead. Your planning will help you to promote and train people within the business so you’ll spend less time recruiting for external candidates.
4. Get the Big Picture. A solid business succession plan will help you to see the big picture of your business, both now and in the future. With this perspective, you’ll have a better understanding of the day-to-day happenings of your business, and you’ll get to know the strengths and talents of your workforce. 

As you can see, the best time to start thinking about business succession is now. It takes longer than you think. Feel free to reach out to us to discuss your own succession plan and what you can do to prepare for the future. 

For more detailed information on how to conduct your business succession planning, register below for our Succession Planning event in March 2017: