In celebration of International Women’s Day this week, we wanted to highlight women business owners and the best ways to protect their businesses. A business succession plan is an important part of running a business in the case of an emergency, and for women business owners there are many reasons it’s even more necessary to have a proper succession plan. We found 58% of business owners do not have a business succession plan and while all business owners should have a solid succession plan, there are many reasons why it is especially important for women to take charge of this important plan for their businesses.
What happens to your business if something happens to you?
Much like planning for your personal estate, it is hard to think about what will happen in case something happens to you. Aside from thinking about the worst happening, women are also more likely to have other events they need to plan for versus male business owners. It’s proven that women are more likely to step back from work responsibilities to care for family, whether it be an emergency situation, having children, or other personal matters. With this proven fact, it’s essential for women business owners to have a proper succession plan, be it for a short term leave, or leaving the business permanently.
What Women Business Owners Should Consider in their Business Succession Planning
Planning for Short Term Leave
For whatever reason that you may need to step back from your business for a short period of time, have a plan for who will be running your business during that time and that any of your employees would know what to expect.
This is of course easier if you have planned time away coming up, but what if there is an emergency? Having a plan in which both you and your employees know what to do is key. In the event you become incapacitated, your employees should know who to call, who would be in charge, and what to do. It’s not easy to have that discussion, but it could ultimately save not only your business, but your employees livelihoods as well.
Long Term Business Succession Planning
It’s inevitable that one day you will leave your business, whether it’s retirement, selling the business, or something more unfortunate. Having a plan long before any of these events may happen will help to alleviate any bumps in the road and any potential lags in your business operations.
Here are items to consider in your long term planning:
- Choose your successor– probably the most important decision you’ll have to make is who will take over the business. It’s important to obviously choose someone you trust, but also someone you will have time with to train and who’s goals align with yours.
- Have proper documentation– your succession plan should include the right documents for your business and outline of your succession plan. This includes any partnership agreements, operating agreements, shareholder information, specifics of your successor plan, etc.
- Know your business valuation– this will help if you are selling the business, or for your successor, to know what the business is worth for any future legal needs or planning.
Do you have a business succession plan or need one? We can help you with your business needs. Please contact us to discuss any questions you have and learn how to get started.
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 a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, 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.