In 2007, I wrote about the importance of business succession planning. Nothing has changed. Having a clear plan as to how to transfer the ownership of a business is crucial. However, merely transferring your interest in a business to your next of kin is only part of the equation.
A good business succession lawyer will also try to make sure that you are comfortable with who will actually run your business when you no longer capable of doing so. If you are not really sure whether any of your family members can run the business, and you have not been mentoring someone to take the reins from you, it is probably a good idea to meet with a business consultant.
Tom Reinhard of the Juncture Group suggests that owners should document and make flow charts for key business processes and develop position descriptions for key employees. If a key person dies or suddenly becomes ill, this information can be vital to the continuity of a business. Tom also notes that by going through this process, owners and managers often find ways to improve their business.
Tom specifically recommends:
- Document organizational roles and responsibilities along with a chart of organizational reporting relationships. Writing clear descriptions of each employees roles and responsibilities, has a side benefit besides making a new employee’s job clear. It can also help uncover when employees are duplicating their efforts or when there are gaps in responsibilities. These descriptions can be very helpful in searching for and identifying suitable candidates to fill vacant job positions.
- Developing base line documentation of core business processes. After members of your staff describe the tasks for which they are responsible and write down the details of how they accomplish their duties, these written descriptions can be improved though the development of work flow diagrams and flow charts. The process descriptions and charts often reveal opportunities to improve the quality and efficiency of the business. It is also a great way for a new senior executive to obtain a quick understanding of how the business runs.
- Engage the key members of the organization in periodic review and update of the aforementioned documents to adjust for changes and process improvements. Getting your staff involved in maintaining process documentation is a great way to involve them in improving the efficiency and productivity of the business.
There are many things that are out of your control as a business owner. However, by working with a business succession attorney and a business consultant you can better ensure your enterprise continues to move forward if tragedy hits.