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Successional planning is critical to any business whether it is a small, big, family owned or partnership business. This process involves
control and ownership of an enterprise to new management. The most common options of ownership transfers include transferring to a family member, to a non-family member or changing business ownership through management buy-in, management buy-out, a sale or through voluntary liquidation. This process is part of the future planning ofa company. Every partner in your company is a subject to the succession plan.
It Ensures Continuous Supply Of Competent Personnel
Many people think that succession planning is only a requirement in family businesses and multinational companies. Actually, this
type of planning should be an integral part of every company’s strategic plan. How will a company develop and nurture human capital if there is no succession plan? Succession planning is the only way to assure proper and continuous sequence of qualified people to move up and replace the retiring current generation of managers.
It Motivates The Current Staff
With a good succession plan, the company will enjoy continuous supply of well-trained and experienced individuals filling the
positions of those who retire or resign. These well motivated staff members are willing and ready to take the vacant key positions. The company will not have to throw any individual to the vacant position. Many companies are at stakes when a top executive leaves because they can’t figure out the appropriate replacement. But with a good plan, a qualified well-trained candidate can fill the position without a hassle.
It Nurtures And Develops Positive Goals
Another great importance of succession planning is that it develops positive goals amongst key personnel, which will eventually help keep them with the company. It will also assure them a position in each of the executive positions in the succession plan. This keeps the entire team to work together and stay cohesive towards achieving the company’s goals. These prospective successors will be certain
of their future in the company and this will boost their performance.
It Earns A Company Good Reputation
A company with a good succession plan will earn a reputation as good challenging, stimulating and a comfortable place to work. With that, your company will not only get more clients but it will also get more good people to hire.
It Eases Business Ownership Transfer
The succession plan plays a very important role in the event of transferring company’s ownership. The plan structures properly how the business should be transferred to a family member or sold to any other party. This will make the transfer process transparent and gratifying because every stakeholder took part in creating the plan.
Preparation of a succession plan should not be rushed as it requires time and sound decisions. Business owners who seek smooth transition without compromising the company’s resources and personnel should consider preparing a sound succession plan. To get the right advice from an accredited Business Law Specialist who does this day in and day out, contact Joe Gilles
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Giles Payne & Co.
506 Bunnerong Road
Matraville NSW 2036
02 9661 6044