The idea of succession planning for SMEs can feel like something only large corporates need to think about. But the truth is, without a plan for who might take over key roles when people move on, your business is left exposed. Whether someone retires, resigns or simply needs time away, not having future leadership in mind can quickly turn into a crisis.
Succession planning for SMEs doesn’t need to be formal or complicated. It just needs to be realistic, intentional and aligned with the direction your business is going. When it’s done well, it not only protects you from risk but also helps develop and retain your future leaders.
Why Succession Planning Matters in Small Businesses
In larger organisations, roles are often backed up by layers of management. In SMEs, it’s common for one person to hold a lot of knowledge, responsibility and influence. If that person leaves or becomes unavailable, it can have a serious impact on business continuity. According to The Employment Law Solicitors, many UK companies are facing growing leadership gaps, particularly in small businesses without a clear plan in place.
Succession planning gives you space to step back and think about where those gaps might appear. It’s about identifying your key people, understanding their strengths, and making sure others are developing the right skills to step up when needed.
It also plays a key role in staff retention. When people can see a path for progression, they’re more likely to stay and grow with the business.
How to Start Succession Planning in an SME
You don’t need a ten stage framework or board-level presentation. In most small businesses, good succession planning starts with asking a few simple questions.
- What roles are business critical?
- Who are the people in those roles now?
- If they left tomorrow, what would break?
- Do we have anyone internally who could step into those roles with support or development?
This kind of thinking naturally links to how you approach resourcing more broadly. It’s not just about reacting to vacancies. It’s about proactively shaping your team so it’s ready for what’s coming next. If you’re already working with a flexible recruitment or workforce planning partner, they should be helping you think about this. (You can read more about how we approach this in our Resourcing services.)
Identifying and Developing Future Leaders
Once you know where the future gaps might be, the next step is to look at who could grow into those positions.
Look for team members who show initiative, take responsibility, and have the right values. Then think about what kind of learning or stretch opportunities would help them get ready for more senior responsibilities.
Leadership development in SMEs doesn’t have to mean expensive courses or formal programmes. It could be project-based experience, mentoring, cross-functional exposure or structured feedback. The key is to give people room to grow in a way that fits your business.
Common Pitfalls to Avoid
One of the most common mistakes is waiting too long. If someone hands in their notice and that’s the moment you start thinking about succession, it’s already too late.
Another trap is assuming that promotion equals leadership. Not everyone wants to manage people, and not everyone is suited to it. Your succession plan should focus on what the business needs and where individuals can genuinely add value, not just who’s next in line.
It’s also important to be open with your team. Succession planning doesn’t need to be a secret. In fact, involving people in these conversations can increase trust, engagement and transparency around progression.
Bringing It All Together
Succession planning for SMEs is about being prepared, not just hopeful. It helps you build a team that can adapt, lead and grow as your business does.
By combining clear thinking around resourcing with a practical approach to leadership development, you create a pipeline that’s built for your future, not just your present.
Whether you need support identifying future gaps, developing your people or aligning your hiring strategy with long-term goals, MYHR works with businesses like yours to put the right plans in place. Let’s talk.