Retirement means different things to different people, for some retirement is not having to go to work anymore and being able to take up a new hobby, for others it means an end of an era, a scary time when they don’t know how to fill their time after spending so long working to achieve what they have in their lifetime at work.

For business owners, this can be made worse by the fear of what will happen with the business that they have built up over their lifetime, and what impact will happen to the staff who have helped them to achieve so much.

For the business, retirement means losing a member of the team and the invaluable experience that they have built up over time.

As with any member of staff, succession planning is invaluable to the business.  If a member of staff was critical to the operation of the business, and they were reaching an age where they may consider retirement, a business owner would look at how they could plan for the loss of that member of staff. It is no different when the owner is reaching that stage except the impact of not doing so may be even greater.

Going through the process of succession planning can bring benefits to the business owner, one of which is an increased value of the business should they need to sell the business or raise external finance.  But there are other internal benefits to the business. 

Creating a succession plan can help other members of staff to understand their role within the business and also what career progression is available to them, which can increase staff retention and motivation.

When a senior manager or owner leaves the impact of this can be felt for many years, especially for the owner.  But creating an environment where the owner can step back from the busienss whilst still being available to the business to assist and advise.

The idea is that a person steps down from their role within the business and becomes the mentor for the person who will replace them. This can then allow the person retiring to slowly reduce their workload and responsibilities within the company, whilst still using their knowledge to help the transition to the new person. 

Creating a structured handover, reduces the risk to the business by ensuring that the information is not lost when the person leaves, but also can provide the person with a new lease of life, reducing their stress whilst also empowering them to grow and take on additional skills.  For business owners, this can also open up additional opportunities for both the owner and the business. 

Imagine a scenaro where the busienss owner steps back into a mentorship role for the new managging director, then steps back into an advisory role within the business, maybe taking an Non Executive Director role to advise the business.  At that point they may also want to take on other Non Executive Director roles within other busiensses, allowing them to expand their knowledge whilst bringing back to the boardroom aditional knowledge and experience.   The owner could then look at maybe taking an industry role.