Succession planning: It’s never too early to start thinking ahead
Ross McFarlane, business finance director at Aldermore | 08:58 Wednesday 5th June 2019 | 0
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
Gravity selects Finastra to power banking and lending services
Gravity has selected Finastra’s Fusion Essence in the cloud solution for its end-to-end core banking capabilities...
An interview with Paul Stockwell: Islamic finance has ‘enormous opportunity’ for growth over coming years
In an interview with Specialist Banking, Paul Stockwell, chief commercial officer at Gatehouse Bank (pictured above), discusses increasing awareness of Islamic finance and opportunities in the banking world...
Revolut for Business launches expense management tool
Revolut for Business has launched a new expense management tool designed to simplify the handling of expenses for growing businesses...
Leek United strengthens intermediary team
Leek United Building Society has strengthened its intermediary team with five new appointments...
BCR awards £10m to Atom bank
Atom bank has received a £10m grant as part of the Capability and Innovation Fund Pool C grants announced by the board of Banking Competition Remedies (BCR)...
Bank of Ireland UK updates broker portal
Bank of Ireland UK has revealed that it has relaunched its broker portal...
Unity Trust Bank increases lending by 47%
Unity Trust Bank has reported an underlying pre-tax profit of £4m in H1 2019, an increase of £1.2m compared with H1 2018...
Taxing times for SMEs
Small business owners are the most creative and resilient individuals I know...
Metro Bank to open first store in the Black Country
Metro Bank is set to open two stores on 20th and 21st September in Solihull and Merry Hill...
TMA Club adds Harpenden Building Society to lender panel
TMA Club has added Harpenden Building Society to its lender panel, giving its members access to the building society’s range of mortgage products...
N26 appoints chief banking officer
N26 has appointed Thomas Grosse (pictured above) as its new chief banking officer...