CHICAGO ( TheStreet) -- Expect the best, but prepare for the worst. Every business owner knows he should have a succession plan in place if he becomes sick or incapacitated, but it's hardly a priority. Running a company these days is tough enough -- who wants to worry about what might happen years in the future?Avoidance of the succession issue is widespread. A recent study by leadership advisory firm Heidrick & Struggles and Stanford University's Rock Center for Corporate Governance found that more than half of U.S. and Canadian companies surveyed could not immediately name a successor to their CEO if the need arose. The situation wasn't much better when it came to training workers for leadership roles: A third of the companies said they had no viable internal candidates for CEO. Of the companies that did, the majority had not approached those candidates to ask if they even wanted the job. Without succession plans in place, companies risk months of upheaval, staff uncertainty and lost sales. Although the study focused on large- and midcap companies, many of its findings apply to small businesses as well, says professor David Larcker of the Stanford University Graduate School of Business. "A key difference is that there are typically family issues with small firms, such as the founder appointing one of his sons or daughters as the next CEO," he says. Just because you're passing the business to the next generation doesn't mean the transition will go smoothly. Your children might not actually want the job (have you asked?) or have the skills to run it successfully. Be prepared to look outside the family if necessary and broaden your search if none of your workers seem up to the job. "It's important to look carefully at both internal and external possibilities for a successor," Larcker says. "It could even be somebody from one of your key suppliers or customers." What makes succession planning so hard for many small businesses is the difficulty of separating a company from the person who started it. A small business's founder is often the face of the company to customers and the community, and it's hard to imagine anyone else in that role.
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