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3 Reasons It’s Good to Have a Succession Plan, in Writing

As a business owner, you should start thinking about succession planning long before you actually need it. Said this way, when you need, it’s likely too late.

What will be your business’s legacy? Who will take over for you? Will it still be the same company? Is selling an option for you? Writing down your answers will help you focus on the reality of the process. Going through this exercise before you are ready to exit makes sense because:

1.  Succession planning can help the company now.

Succession planning is a great way to encourage your current management to think about what kind of role they want in the future. Letting your employees know they are a valuable part of your future plans can significantly increase their morale and commitment.

2. You cannot plan for the unexpected, but you can minimize the impact.

It’s impossible to plan for every unexpected event, as much as we try. That event can be related to health, family or key employee, but when it happens, do you know how you would react, what you would need to do? Creating options for your team to use in the event of a leadership emergency can make transitioning to new management run much more smoothly.

3.  A succession plan helps you set the tone and ideals for the company.

When you bring in new leadership, it can disrupt a number of things in your business. The new leadership may not have the same ideals or goals for the company as you did. He or she may not appreciate the same things or have similar values.

A succession plan allows you time to vet potential leadership options and pick the right person for the job when the time comes.

While succession planning isn’t easy, it is necessary. If you need some advice to point you in the right direction, our team can help you get started. Call Tennessee Valley Group, Inc. today for more information or to schedule an appointment.

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Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."