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Small business guide to succession planning

Do you have a succession plan for your business?

PwC’s Africa’s Family Business Survey 2021 noted that 76% of African family businesses don’t have succession plans in place. Only 41% of these business owners have a last will/testament in place, which means that, when they die, there is no fixed plan to ensure that the business is formally passed down to the next generation.

What is a succession plan?

A succession plan is a strategy to safeguard the future of a business by replacing key employees should death, disaster, or any other exit require it.

Why should small businesses have a succession plan?

Good succession planning acts as a business’s insurance policy for sustainability. Top roles are often difficult to fill – especially at short notice – and small businesses need to be prepared to react to departures, whether they are planned or not. 

What happens to a business without a succession plan?

Without a clear succession plan in place, the business is at risk of being ‘in limbo’ while the search for a replacement is on. This could result in significant losses to the company and an unmotivated and fear-driven workforce. Current employees could compete for the vacancy, and there could even be animosity towards a new hire if they weren’t part of the original workforce. Worst case scenario is that the business could fail without its leader or a suitable replacement at the helm.

·        What to include in a succession plan?

·        How to identify employees for succession planning

·        What are succession plan options for small businesses?

·        Who can help small businesses with succession planning?

·        What to avoid when succession planning

 

To find answers to these and more read the full article here.

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