Succession planning is a vital consideration for any business- the ability to continue operating at the expected level during a change in leadership can be make or break. It is not just high-level corporations who must consider the benefits of a succession plan – family-owned businesses such as food distributors must also make in-depth arrangements for the continuity of business practices in the event of a change in leadership.
Statistics show that less than half of family-owned businesses are able to successfully “pass the torch” to the next generation, leading to many lost businesses. By choosing the right ERP Platform, such as Prime FoodService powered by Acumatica, food distributors can give themselves the best chance of making the jump to the next generation.
Distributors have several industry-specific concerns when it comes to these matters. Forward thinking food distributors will have an eye on ensuring that vendors are not only introduced to the new leadership, but that their contracts are up to date and renewed. Inventory concerns include ensuring that slow-moving items are phased out while popular items are ordered and available in case of panic buying. Prime FoodService also offers enhanced automation capabilities that will ensure a smooth transition on the client and vendor facing fronts.
Looking internally every succession plan has multiple parts – preparation, evaluation, transition, and exit.
Preparation is primarily focused on ensuring the affected parties- employees, vendors, and clients- are all ready for the upcoming change. In addition to the considerations outlined above distributors should take special care to ensuring that every employee’s role in the transition is clearly defined. This stage is vital to an effective transition- as the old adage goes “fail to prepare, prepare to fail”.
Evaluation is concerned with finding the best possible successor for the business. Family-owned companies may or may not face a “succession crisis” where there are multiple candidates to take the helm. Other times the next generation may not be prepared, skill or knowledge wise, to step into the role. Prime FoodService’s user-friendly interface is helpful for orienting and educating users on all aspects of the business, offering insight to areas that a potential successor may need to familiarize themselves with.
The transition phase is the hard part- handing over the keys to the kingdom to the next generation by arming them with the tools and knowledge they need to successfully run the business. Experts advise a side-by-side co-working experience for at least six months, which allows the successor to slowly take on more responsibilities as they become more comfortable with systems and processes. Gauging feedback from employees, vendors, and customers is critical at this juncture.
The final aspect of a successful succession plan is the exit- stepping away and leaving the new person in charge. While many executives choose to maintain a small, even informal role within the company’s hierarchy, it is important to not overstep and undermine employees confidence in the new leadership. This is especially important in small, family-owned businesses, as family dynamics are in play and are often known to employees and vendors alike.
Choosing the right ERP platform can give businesses a leg up in the succession planning process. Prime FoodService is the ideal choice for family-owned food distributors as it provides industry specific tools tailored to meet the needs of the small to mid-sized business.