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Effective Business Succession Planning: Foresight is vital
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Posted On :
Nov-30-2011
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Article Word Count :
510
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Owning and operating a family or closely held business could be a tough thing to do. Although it may well be a long time coming, business succession planning is a risk management solution that needs to be addressed early on.
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The most difficult part for a business usually comes at the time when changes take place. For example, imagine a fairly sizeable company with consistent cash flow. If the owner or chief officer suddenly dies, with no one immediately in line to replace them, the company typically falters.
With no clear succession strategy, clients or partners will frequently bring their business somewhere else. Transition phases generally result in financial losses for a business. If the losses are minimal or significant will depend on a definite succession plan. Sometimes, uncertain succession might even result in the shutdown of a business. Smart risk management solutions would tell us early on that distant as it could be, that circumstance would be a threat to the business. Wise business owners ought to have the foresight to handle the problem before it becomes a fact.
What are some tips for effective business succession planning?
Prior to getting into the different tips that companies need to keep in mind, you'll find corporations with effective succession planning that owners can read up on. These include major computer software companies, and also hotel and other multinational firms.
The initial step in successful succession planning should be to outline the abilities and expertise required of the job. Determine what attributes to find in a potential successor. When establishing the criteria, keep in mind what is on the line. Naturally, the next step should be to evaluate people based on the criterion that's been set.
When everything has been set, it's time to identify individuals that fit the bill. Determine people who have high leadership potential. Most family-run firms will usually have an heir study and go to great lengths to keep the business in the family. This is especially true for Eastern cultures, but not all companies are family run. At times the heirs are fully separate from the enterprise. That is why it's imperative that you recognize individuals within the company that are likely leaders.
Once potential individuals have been identified, the next phase is to offer training and development opportunities. When business people begin eyeing those who could replace them, it ought to come naturally to teach the individual the tricks of the trade. Taking over an important role shouldn't just lie on potential alone. Accurate knowledge needs to be provided to make sure that a potential replacement could live up to expectations.
Another main factor in business succession planning is ensuring dedication and retention among employees. A firm with a significant amount of members with tenure implies that the owner is doing something right. Tenure usually means that employees are receiving the growth and development prospects they are looking for. To put it briefly, they are satisfied. Several knowledgeable people who understand what the company is about should provide a terrific resource pool for future company growth.
Entrepreneurs may need to look into long term objectives for the company. They don't wait for major hits to come their way. Foresight is key to success.
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Article Source :
http://www.articleseen.com/Article_Effective Business Succession Planning: Foresight is vital_112254.aspx
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Author Resource :
Oronzo Fonti is a business consultant who focuses on offering clients with risk management solutions. For more information on how these could help you and your business, please read up about business succession planning.
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Keywords :
risk management solutions, business succession planning,
Category :
Business
:
Business
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