Emergency Succession Plans: How to Protect Business Continuity

You pour everything into your business. You make the hard decisions, manage the risks, and steer the ship. But have you stopped to consider who takes the helm if you are suddenly unable to? It isn't a pleasant thought, but for small to midsize business owners, it is a critical strategic question.

Unanticipated crises can threaten even the most efficient companies. The risk is often higher when the owner wears multiple hats—handling everything from business development to high-level strategy. That is why your company needs an emergency succession plan. Unlike a traditional succession plan, which focuses on long-term retirement or exit strategies, an emergency plan addresses who takes over tomorrow if you are seriously ill or incapacitated. Its purpose is simple: clarify responsibilities, preserve operations, and reassure your team.

Here is how to build a plan that keeps your business moving forward, no matter what happens.

Identifying Your Contingency Person

You have likely created contingency plans for your operations—data backups, supply chain alternatives, or remote work protocols. An emergency succession plan is simply identifying "contingency people."

For larger organizations, this might be straightforward; a COO or CFO can often step in temporarily. However, for small to midsize companies, the challenge is greater. If you are heavily involved in retaining key clients or bringing in new business, filling your shoes is a tall order.

You need to name someone who can credibly step into a leadership role immediately. Look for a trusted individual who has the skills and temperament to stabilize the company during a difficult time. Once you identify this person, consider the "domino effect." If your Head of Sales steps up to become Interim CEO, who takes over the sales department? Your plan should account for these shifting responsibilities.

Empowering Your Successor to Act Fast

Identifying a successor is only the first step. You must also empower them to act. If a crisis hits, they need the authority to keep the lights on and the payroll running without delay.

Meet with your chosen successor to discuss the role in depth. You may need to train them on specific executive duties or involve them in high-level decisions now so they get a feel for the entire business operation.

Crucially, ensure they have the legal and logistical access to do the job. This includes:

• Signatory authority for bank accounts.
• Access to accounting and payroll systems.
• The ability to execute contracts and approve expenditures.

You should also work with your attorney to update company governance documents to reflect this temporary leadership authority.

Centralizing Mission-Critical Information

Even the most capable leader will struggle if they are locked out of the system. It is critical to document the financial, operational, and administrative information your emergency successor will rely on.

Maintain a secure, centralized location for key records, including:

• Banking credentials and login details for essential systems.
• Vendor and customer contracts.
• Payroll records and HR data.
• Tax filings and financial statements.

Without this documentation, an interim leader may be unable to keep the business functioning smoothly. Furthermore, review your insurance coverage. Ensure your successor has access to insurance records and that your policies—such as key person insurance or disability buyout policies—align with your emergency plan’s objectives.

Don't Keep It a Secret

A traditional exit strategy is often kept quiet until it is finalized. An emergency succession plan is different; it must be transparent.

Once your plan is ready, inform your team. Explain how it affects their day-to-day duties if the plan is executed. This transparency reduces anxiety and confusion during a potentially chaotic time. Additionally, develop a strategy for communicating with external stakeholders. You need a plan for how and when you will notify customers, vendors, lenders, and investors to maintain their confidence in the business.

Start Planning for the Unexpected Today

We know that running a business is about making smart decisions and taking calculated risks. But leaving your succession to chance is a risk you shouldn't take.

If you haven't created an emergency succession plan, now is the time to start. If you already have one, review it annually or whenever significant changes occur in your business. At SD Mayer & Associates, we are here to help you evaluate financial risks, document internal controls, and strengthen the processes that protect your legacy. Let’s ensure your business is ready for anything.