Are you a Small Business Owner? Importance of a Policies & Procedures Manual in Succession Planning

A policies and procedures manual outline the operational and organizational structure of a business and it is important for its survival. Your policies and procedures manual is significant, especially when conducting a succession plan. This is the process by which a successor is chosen for a key position.

last updated Monday, March 18, 2024
#Policies and Procedures #Procedures Manual

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by John Burson

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A policies and procedures manual will identify a successor and lay down the long-term processes and goals by creating a structure through guidelines and rules. Therefore, the succession transition becomes easier. The importance of a Policies and Procedures Manual is as follows:

Brings Structure

A well-written policy and procedures manual will bring structure to your business. By creating a policy and procedures manual, you will know what the rules are and be able to measure the failures or successes of an operational process and succession planning. Your policies and procedures manual will prepare your business to help less experienced staff and ensure that the management positions are always occupied whenever someone leaves.

Operational Success

You should get help creating your policies and procedures manual, especially when preparing for operational success. Most small businesses don’t have enough financial leadership, and they need help creating control systems. Sometimes, examining external recruitment markets or external benchmarking can help your company assess key positions that may become open in the future.

Levering Human Capital

If you’re a small business owner, such a plan can help you leverage your individuals to succeed. You will only be able to retain good employees if you have a structure. Without a structure, you won’t retain good people but those who like chaos.

Compliance and Control

When you ensure that you have a policies and procedures manual in place for succession, you will also ensure that your company is compliant with the current regulatory rules and guidelines. For instance, many guidelines require ISO 9000 Quality Management Systems, Good Manufacturing Practices for Food and Drug Administration, or Sarbanes-Oxley Accounting and Finance.

Risk Management

According to the Texas State Auditor’s Office, “the main purpose of a succession plan is to create an agency for any risks associated with any planned or unplanned loss of knowledge which is important for the success of your business.” Small businesses should plan who will succeed executives to minimize tax effects.”

 
 
 

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