Issues to consider when creating a succession plan

On Behalf of | Nov 23, 2020 | Business Law

Ideally, you will start thinking about who will run your Pennsylvania business long before deciding to retire. Having a succession plan in place can ensure that the company remains a viable entity when you’re no longer around to run it. There are a few pitfalls to avoid when creating this plan for your company.

Don’t ignore the data

It is important to be objective when deciding who is the most qualified individual to eventually run your business. Ideally, you’ll look at data, such as engagement or performance scores, when making your selection. It is also a good idea to consider candidates who may have gone through adversity during their time with your organization. It isn’t uncommon for those who have failed in the past to learn from their errors and emerge as better leaders as a result.

Don’t forget to create a plan for all levels of the company

Let’s say that you decide to promote the current warehouse manager to CEO after you retire. This means that you have to find someone who is qualified to become the warehouse manager in the new CEO’s place. It also means that you have to find someone to replace whoever becomes the new warehouse manager. Ideally, your succession plan will account for all the personnel moves that take place after you step down.

Don’t ignore the plan once it’s created

There is a good chance that your business model will change between the time a succession plan is created and when it is executed. Therefore, it is important to review it regularly to ensure that it meets the company’s needs now and in the future.

A business law attorney may be able to help draft, review or alter a succession plan document. A lawyer may also assist with the process of transferring an ownership interest in your business to employees or an outside entity. This may be true whether the transfer takes place before or after your death.

FindLaw Network