Succession Planning for Your Business

When you think about your business and all of the daily, monthly, and annual tasks you have to complete, your succession plan may be one of the last things on your mind. This should not be the case.

Proper succession planning is not only the key to the future of your business, but also your personal future. If you are fortunate enough to have a family member or key employee who would like to step into a leadership role as you look to retire, you have a head start on your succession planning. If you don’t, don’t worry. You have other options.

It will take years to get things in order, so planning ahead is important. Here is some general information to help you on your journey:

• When you are considering your retirement time frame, keep in mind that your business will be better off if you remain involved during the transition from your leadership to your successor’s.
• In addition to a succession plan, you may need an estate plan, a legal plan, and a plan for what should happen if you become disabled. Who should you look to for advisement on these issues? Your lawyer, a trusted financial advisor, and your local Economic Development Agency are all good places to start.
• Formal training for your successor is critical to the future of your business. A family succession plan can be complicated if you have more than one family member succeeding you, as each person will have a different role and responsibilities, which can lead to different compensation. Being open and honest with your successors upfront will help prevent issues from arising later on.
• Finally, remember that the continuation of your business affects more than just you and your successor—it affects your employees, their families, your customers, and the community where your business is located.

Your business has been your life’s work. Planning for its future success should be a priority. Check out these additional resources to guide you through your succession planning process:

• https://www.score.org/resource/developing-succession-plan
• https://www.sba.gov/managing-business/closing-down-your-business/plan-your-exit
• http://www.cnbc.com/2014/09/03/4-tips-for-small-biz-owners-whove-shelved-succession-plans.html