Many employees and administrators don’t always think about what will happen when the most important person in the business, the owner and creator, decides to retire.
When starting a new small business, owners have to decide on a wide variety of variables. After the main jumping off points are tackled – what products or services will be offered, what will the company’s name be, how many people will be hired, etc. – leaders have to think about the most miniscule of details, like colors for the logo, the type of devices present in the office and so on.
Much of the focus is placed on the factors that will be immediately needed or plans that should come to fruition within the next five to 10 years or so. It’s easy to just assume that the company, once it sees success, will be able to continue along that trajectory forever.
But, that’s certainly not always the case. Many employees and administrators don’t always think about what will happen when the most important person in the business, the owner and creator, decides to retire. How can Canadian small businesses plan this out so they’re prepared?
The owner needs to draft a plan
Maybe not immediately when a startup opens its doors, but when company leaders hit a certain age, they need to start considering what’s going to happen when they leave. Only the owner can decide who’s going to assume the highest position, as well as other necessary power shifts, so it’s imperative that they start crafting blueprints for the move.
A recent Scotiabank revealed that around 25 per cent of small business owners haven’t yet considered what’s going to happen to their company when they retire, while only 19 per cent have a concrete succession plan. At the very least, the leader needs to legally outline who will be the next head.
That’s not the only blueprint that should be drafted, Scotiabank executives noted. Leaders also need to pen contingency plans in case an accident occurs and the owner dies or otherwise has to step down unexpectedly.
Lean on accounting software
One thing that all companies, whether or not they have long-term plans in place, need to do is use accounting software in the office. Immediately, this can help leaders keep track of real-time finances and dedicate more time and effort to other areas because of ease of use.
And due to the fact that these programs are relatively simple and helpful, they can be used by other administrators once the head of the business decides to step down. This can reassure all involved that the company has the ability to continue into the future.