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Succession plan
A succession plan is the strategy in place to transfer a business from one owner to the next. For small businesses, Succession plan options include: passing the business to family members; selling to partners, outside parties or the public; merging with larger companies; or selling to employees through an employee stock ownership plan.
Succession planning is the development of potential managers to ensure a smooth transition when key vacancies occur in a business. While the term often refers to the top management of a firm or owner of a small business, the principles of success planning can be applied all key management positions in a company.
There are several reasons for ongoing succession planning:
- The loss of a key manager can lead to confusion and loss of efficiency
- Filling a key management position can take several weeks or longer to accomplish
- To maintain the confidance of employees, clients, vendors and investors.
