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.