Strategic plans should cover the next three to five years for small businesses and should be flexible enough to change as the business changes, she said. Business owners need to be able to look at their plans and ask whether the company is still on the right track, whether something should be done differently or whether it should be done the same. Most important, have a contingency plan in case something goes wrong. Few people like to think about what would happen if they suddenly suffered an illness or accident. But if families do not talk about succession early on, it can lead to a crisis when the time comes to hand down the business.
Succession planning is a major part of a company's overall strategic plan.
But it's also one of the most important because if all the good will in the business rests with the founder, once that leader leaves, the value of the company, the profitability of the company, just plummets. Training a successor can take five to eight years, Emerson said, so it's important to start the process well before the owner plans to retire. No matter how much the company leader wants to keep the business in the family, it's important that other family members have choices and not feel pressured, Emerson said. Business owners can avoid this sort of pressure by planning early and having a detailed, documented succession plan, complete with a timetable for the transition process and a contingency plan in case the successor is unable to take over. The final stage of strategic planning is to think about your retirement.