Opening your own business may have been your dream, but sometimes all that comes along with running the business can be overwhelming. With all your hard work, thinking about exiting your business usually isn’t in the forefront of your mind. Succession planning for business owners can seem daunting, but you’ve worked so hard to open and run your business, why not make sure it ends up in the right hands when the time comes? You may want to keep your business in your family, or sell it completely, but either option should come with careful planning.
Succession Planning for Business Owners
If your business is the main asset of your life’s work, make sure you’re protecting your legacy. The first step to creating your succession plan is recognizing that you will one day leave your business. We can plan for a scheduled exit and all that goes with transitioning operations to your successor, but we also need to realize that we need plans for emergencies. If something were to happen to you, who would take over operations of your business? In either scenario you will need plans for the transfer of ownership. Do you need time to train your successor? With a planned exit you can take the time to train your successor and put operations plans into place to ensure a smooth transition. Keep all your employees in the loop with plans to help retain your staff during a transition.
Choose the Right Successor
Probably the biggest decision you’ll make when creating your succession plan is who your successor will be. You may dream of handing over the keys to a family member, or you may need to find someone else entirely. Sometimes choosing your successor isn’t an easy decision, but make sure the person you choose makes sense. If you are leaving your business to a family member, do you know that they share your dream? If a current employee or an outside candidate is on your radar as your successor, be clear in your vision for the business and find someone who aligns.
Talk About Your Plan
When you have your succession plan in place, make sure you talk about it. One of the biggest mistakes business owners make is either waiting too long to make a succession plan, or not telling anyone that plan. Don’t leave your employees in the dark. If there’s an emergency, who should be notified? Do they know what to do? Have a well laid out plan with either your successor, or another employee, who knows the day to day operations so things can continue to run smoothly. Even if you don’t plan to leave your business for a long time, talk about what your goals are and what should happen if an emergency arises.
There’s so much that goes into succession planning for your business. We can help whether you are just starting or want a second opinion on your current plan. Contact us and let us know how we can help.
Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is it a substitute for, a qualified legal advice. Your review or receipt of this article from Lexern Law Group, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.