Succession planning: It’s never too early to start thinking ahead
Ross McFarlane, business finance director at Aldermore | 08:58 Wednesday 5th June 2019
Succession planning is a necessary exercise for all businesses, but it is vital for SMEs.
Small businesses rely on the specific expertise of individual staff members, without which they may struggle to maintain relationships with important clients and fail to innovate and keep up with key competitors.
Our latest Future Attitudes report shows that more than two in three leaders (70%) of the UK’s small- and medium-sized enterprises have no clear plan in place to ensure their business does not suffer when key staff leave. This is very concerning, particularly given the pivotal role SMEs play in boosting the UK’s economy.
Fail to prepare, prepare to fail
Business owners continuously face arduous and time-consuming demands when running a company. They are under significant pressure to meet the expectations of both staff and customers, meaning it’s both easy and tempting to push succession planning far down the list of priorities.
The sooner SMEs think ahead, the better, especially as unexpected events can and will happen. The long-term survival of an organisation depends on having a contingency plan in place. Succession planning is something that should be embraced, rather than avoided.
People matter most
It’s important to remember that a business is nothing without its employees. Losing a key team member is far from ideal, but planning for this scenario is vital as workforce changes are inevitable.
It’s not all bad news
According to our research, almost half of business leaders at medium-sized businesses have already planned their exit. This is certainly encouraging, and hopefully other SME owners will follow suit. Businesses need to have the tools in place to enable them to function without their current owner. Without having a solid plan in place, executives can’t guarantee the success and sustainability of the business.
It’s not easy to discuss succession. Business owners are often so absorbed in the running of a company that they put off thinking about ‘less urgent’ issues. However, by developing a well-thought-out contingency plan, SMEs can future-proof all the hard work they have put in up until now.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
N26 introduces MoneyBeam to UK users
N26 has introduced MoneyBeam to its UK users which will enable them to instantly send money to other users of the mobile bank...
NatWest names new CEO for Mettle
NatWest has named Marieke Flament (pictured above) as the CEO of its SME digital banking subsidiary Mettle...
CYBG to rebrand as Virgin Money and launch a new business current account
CYBG has revealed that it will rebrand to Virgin Money over the next two years with new Virgin Money-branded products...
New bank Chetwood Financial reveals long-term ambitions
Chetwood Financial is aiming to use technology to offer better deals to customers, having secured a banking licence late last year...
The opportunity for accountants to help businesses
In light of bank and building society branch closures, a new report published by Oxford Economics in partnership with Funding Circle has revealed that in the UK — despite the vast economic output generated by SMEs — small business lending accounts for only 2% of banks’ balance sheets...
Paragon Bank’s structured lending team passes £100m milestone
Paragon Bank’s structured lending team has passed its £100m milestone 18 months after launching...
Hanley Economic expands intermediary support team
Hanley Economic Building Society has appointed Kate McKeon (pictured above) as an intermediary sales assistant...
Gatehouse Bank names new direct adviser
Gatehouse Bank has appointed Robert Siddall (pictured above) as a direct adviser...
British Business Bank increases facility with Simply to £180m
Non-bank lender Simply has received a third facility of £60m from the British Business Bank under the latter’s ENABLE funding programme...
OakNorth provides facility for cloud platform provider acquisition
OakNorth has provided a loan to managed service and cloud platform provider Oncore IT for the acquisition of Fuse Technologies...
Monzo to launch first USA accounts this summer
Monzo has announced it will be launching its first accounts in the USA this summer...