Business owners looking to retire: Is your succession plan in place?

Six steps to help create a “talent pool” based succession plan process.

As a business owner getting closer to retirement, one thing you can do to alleviate pain during the transition is having a solid succession plan in place. By definition, “Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available.”

Michigan State University Extension partner Northern Lakes Economic Alliance works with companies in Northern Michigan developing their own succession plans. Here are 6 steps to help get you started on yours.

  1. Identify your current staffing needs - Take a look at your current staffing plan. Which of the positions are most critical to your business' success? Look at every position no matter if you think they're replaceable. Keep in your mind if they possess experience or knowledge that cannot be easily replaced. How many positions will you need to fill now or in the future?
  2. Develop your “talent pool needs” - Knowing what type of positions you have and what you’ll need in the future; you can now develop a training plan and “pool” of candidates to fill those needs.
  3. Identify employees to fill the pool - Look at current staff and their potential. Can they fill your needs or do you need to hire out. When hiring make sure the new employee is aware they are being put into the “pool”
  4. Train your candidates - Now that you’ve identified who, it’s time to train them. Work with them through the training plan and get them where you need them to be. Create individual professional development plans for each employee.
  5. Promotion - When a position opens in your staffing needs plan, look to your “pool” to promote.
  6. Evaluation - This type of succession plan will be ever-changing as employees come on or off your staff. Set a regular evaluation schedule to make sure you are still on target.

Having a succession plan in place and going through the process of making sure your employees and business is going to continue to succeed long after your retirement will be a weight off your shoulders.

Michigan State University Extension has had a unique relationship with the regional economic development organization Northern Lakes Economic Alliance (NLEA) for more than 20 years. Recognizing the strength of combining resources, this partnership focuses on economic development, entrepreneurship growth and community infrastructure throughout a four-county region in the northwest Lower Peninsula, specifically Antrim, Charlevoix, Cheboygan and Emmet counties. As a result, the NLEA utilizes resources offered through MSU Extension as it provides leadership to state-wide programs sponsored by MSU Extension.” 

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