02 Sep Succession Planning also includes Business Contingency Planning
One of the four business exit planning cornerstones, Contingency Planning has to answer the question “How will the business succeed if something suddenly happened to the Owner and that Owner does not return to the business tomorrow?” It is nice to have a long term plan, but if something was to happen to the Owner tomorrow you do not want to have all of the long term planning fall apart. This part of the Planning also provides an Owner with an opportunity to look at their business from the “outside looking in” and ask how would this business run without me? And can it?
There are Four Important Aspects of Business Contingency Planning–What is the Impact on your Business in connection with:
1. Loss of Financial Resources:
Either by guarantees or loans made by the owner to the business.
2. Loss of Key Talent:
Who will immediately fill the role of the owner? What jobs/tasks does someone need to fill?
3. Relationships with Customers and Vendors
Who is going to immediately maintain the relationships you have with the customers & vendors?
4. The Impact on Key Employees:
Will they stay or go to work for the competition immediately?
Contingency planning results in the creation of a business continuity plan and a living will for your business. It clearly presents your instructions on what should happen regarding the operations of the business and who is responsible immediately for assuming the various roles of the owner.
The purpose of business contingency planning is to document your knowledge of the business operations so that all of your experience and insight does not go away, even if you do.