One of the by-products of an aging population is that an ever-increasing number of business owners are currently preparing for retirement. Roughly 60 per cent of business owners in Australia are over the age of 45 years and nearly 20 per cent are over the age of 60. Succession planning is an important part of ensuring your company is set up to succeed into the future.
It’s not just important for the business, it’s important for the economy.
According to the Australian Small Business and Family Enterprise Ombudsman 2019 ‘Small Business Counts’ report:
“An aging population of small business owners might cause problems in the future as they retire and either attempt to pass their business on to younger family members or sell. There may not be enough younger owners willing to run a small business or able to access finance to start a business of their own, given the decline in home ownership that has historically been used to secure loans.”
So how can you ensure your business lives on after you’re moved on? Here are my five top tips
Make it an official part of your operation
While lots of businesses might have an informal or unofficial plan in place, formalising the process means it gets the full attention it deserves and allows you to put contingencies in place.
Prioritising – making sure people are ready to take over
It’s important to identify early – earlier than you might think – who is willing to take over so you can start building their leadership capability now, rather than hoping they’ll learn on the job.
Learn and share knowledge with others:
Business and community groups can become a great way of learning how to improve your succession plans and share knowledge with others. We’re part of Family Business Australia and the Wanneroo Business Association, which have been invaluable in assisting our handover planning.
Employ people who share your values
By ensuring your employees and colleagues share your goals and values, you increase your pool of people who can step up into leadership roles – confident in the notion that they’ll run the business in the same manner that led to the previous generation’s success.
Systemise your business
It’s important that every member of the organisation clearly understands the processes used to operate efficiently and effectively. By being clear and structured, you enable succession planning to become a defined part of those systems and it fits more easily within the day-to-day operations.
To ensure that your business is sustainable in the long term, putting these practices into place is the key. That way, you can ensure you’re fit for the future.