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What will happen to your business when you’re no longer able to run it? The recent Succession Planning Study from the North American Retail Hardware Association (NRHA) takes a look at how independent retailers are dealing with the succession planning process. NRHA surveyed 233 owners, managers and other employees to learn how operations are preparing to make ownership transitions.
The study found that less than 30 percent of participants currently have succession plans in place. This lack of planning is risky for business owners who are nearing retirement, needing to sell their business or facing disaster, particularly if they have not trained the employees or family members who will transition into the role of owner or manager.
Of the survey respondents who have developed a succession plan, 44 percent say the parties involved were “very prepared” for the process. The majority of study participants were the successors in the plan, with more than 80 percent of respondents saying they were stepping into the business as part of the succession plan.
When crafting a succession plan for their operations, retailers need to consider many issues, including who will take over the business, the schedule for handing over ownership and what the owners’ roles will be after they sell the business.
More than 60 percent of study participants say that after the business changes ownership, the owner who is leaving will still work for the company for a short time. Nearly a quarter of respondents say the exiting owner will leave the business, but will still be available for questions.
To read NRHA’s complete Succession Planning Study, visit TheRedT.com/sp-study.
