Have You Planned How Your Business Will Be Handled In The Future?
Business succession is perhaps something that may not be the first thing you thought of when running a business. Most times people will think of starting up a business and keeping it afloat. With so many things to do and manage in a business, trust us, business succession will be one of the last things you will think of.
Most business owners don’t even think about business succession and who will run their business until it’s too late. You may have several lines of thoughts when you are running your business. For some people, they think that they may eventually sell their business and earn some profits off it. Some people run businesses for the sake of thinking about their kids and grandkids. For those kinds of people, running a business empire means they can have something to pass on to their kids.
Regardless of what you have in mind for your businesses, we hope that you will take some of the factors we have listed here into your consideration.
Reasons To Take Business Succession Seriously
There are many reasons why you should be prudent and start planning for your business’s long term plans. In this article, we have condensed everything and put a list of reasons why you should take business succession in earnest in Malaysia.
1. Buy insurance for your company
There are plenty of business insurances that are available in Malaysia. Business insurances usually work in a way that helps prevent businesses from collapsing on their own. However, it does not mean it will close down businesses entirely due to acts of gods and similar problems.
You can also look into keyman policies where it covers important people in the company and business. Usually people will choose to cover the CEO and other board of director members as they are the key players in the company. There are also cases where important people who are not board of director members get covered under keyman policies too. Usually those are key players and people who make important decisions in the company. They are the kind of people who are difficult to replace.
2. Choosing a successor
This part means you will choose someone who is capable of continuing your business in case something happens to you. Just in case you passed away or are rendered unserviceable to the company, then the appointed successor will step into your shoes and assume your role. Do this while you are alive or when you are still of sound mind.
Appointing a new successor (or naming one) in advance will help with simplifying the transition and set appropriate expectations. You can train the successor “from scratch” and be up to your expectations by the time you have passed away.
In the case that you did not get to choose a successor, it’s ok. Some business owners consider liquidating the assets and closing the business. Some other companies just continue the operations without the business owners.
3. Matching talents to company tasks
When hiring someone to keep the functionalities of the company, you will obviously hire people with matching talents. Upon taking these new hires onboard you will train them to be able to help run the company when you are no longer around one day.
We have talked about how some companies do not have owners in order to keep running. Having said that, as a business owner you can train a team of people who are able to run the company in your absence. When you have passed away, these people can help your company and hire matching talents too.
The only downside to this step is that you will need to train a lot of people in order to keep your business running long term. If it’s something you can manage on your own, then perhaps it’s not too bad.
4. Setting standards for your company
KPIs are ubiquitous across all companies of all sizes to keep the company up and running. When you are still around, you can actively enforce metrics to managing and running a successful company. Train your successors to uphold the same standard you have for your own company.
When you are no longer around, your successors will make sure that your standards are upheld. Your company may be around for a very long time after you have passed away.
Having said all of that, we hope that you are able to find a fitting successor who is able to replace you when you are gone. Although you may not find a fitting successor, you can also choose to train a team of people to continue running your company when you have passed away. Business succession does not mean you choose only 1 person to help you run your company when you have passed away. It can also mean training several people to ensure that your company continues operation when you have passed away.