We pride ourselves on taking a thorough approach to succession planning for business owners. If you own a small business it is important to plan for the future transition of your business. It is estimated that only 1 in 3 businesses survives to the second generation. After years of working hard to create a thriving business, creating a succession plan will make you self-assured that it will be placed in the proper hands for continued success.
These are a few things to consider when making a succession plan for your business:
Picking a Successor
Some people may decide it is best to just sell the business, but if it is a family business you may want to keep the business all in the family. Choosing a successor may be difficult and cause issues if one person is chosen over the other. You need to consider who is the best candidate and this person should be someone you can trust. Discuss the idea of succession with everyone involved and see who is interested in taking over the business. If you already have a business partner your decision may be easier, but choose the person who you know will continue your legacy. Decide what skills and qualities you want your successor to have.
Once you decide on a successor you should start to train them on everything related to the business. Inform them on accounting, taxes, and day-to-day operations. The best way to handle a business succession is to start planning for the future as soon as possible. Start handing them more responsibilities and let them hold the reins more, so you can help them if an issue occurs before you pass on the business to them. It may even be wise to train more than one person. Establishing a strong team of individuals to take on the business will ensure that it will continue to be successful after you pass the torch to the successor.
Once you decide who will take over the business, put the persons name in a legal document. Creating a legal succession plan will help to avoid issues with the court system on who will take on running the business after you move on. Estate planning will also help avoid any conflicts between people in the family or in the business. Communicating with the people who help run your business will help to avoid conflict. If everyone is aware of the succession plan you create, then there will be no issues once the plan needs to go into affect.
We pride ourselves on taking a thorough approach to estate planning. If you have questions about succession planning for your business, please contact us today.