Are you planning to exit your business in the next 5-10 years? Have you thought about succession plans for your business? Large companies typically incorporate succession planning into their performance management process. However, small to medium sized businesses are often less prepared and less likely to have an established succession plan.
An adequate succession plan helps to prepare for a smooth transition to ensure that leadership or ownership changes don’t interrupt normal business operations or any major business initiatives underway. The transition plan may include the acquisition of new talent/management, a transition within a family business, or the sale of the company.
Smaller businesses are more likely to over-rely on specific individuals, and the loss of one key person can have a wide impact. A key component in a small or mid-sized company’s transition process should include preserving institutional knowledge and identifying any skill gaps, which is essential if the same management team has been in place for an extended period of time.
Whether business practices are newly developed or are long-standing within an organization, fresh eyes can help identify the existence of unmitigated risks and where improvements can be quickly realized, ahead of a transition. This can be accomplished through performance of a business process evaluation, which involves assessing all facets of the business, including policies, procedures, processes and controls, in order to provide transformational recommendations.
These recommendations serve to mitigate risks within the organization, optimize business processes, and eliminate unnecessary waste and redundancies. Business process evaluations are designed to assess an organization’s governance, risk management and compliance practices with a specific focus on assessing the processes and internal controls intended to safeguard assets, properly account for revenues and expenses, and ensure strong governance is in place to ensure that the organization is adequately prepared and ready for the next phase of their transition plan.
A business process evaluation involves interviews of personnel, review of documentation and observation of business practices. Accounting activities and reporting processes are evaluated as they relate to the accurate capture and reporting of key financial and performance information. The objective of the review is to provide actionable observations and recommendations intended to enhance the organization's processes and internal control.
How Can Schneider Downs Help?
Our team of risk advisory and information technology professionals assist our clients in optimizing and transforming their core business and information technology processes. We bring solutions to our clients’ issues through our Risk Assurance and Business Transformation Services.
In addition to their technical expertise, our professionals are Six Sigma trained and have extensive experience conducting assessments across diverse industries. Our approach is risk-based and delivered by a multi-disciplinary team. We add-value to our clients’ business by improving their business processes through adoption of best practices.
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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].
Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.
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