Business succession plans contemplate and instruct regarding any changes in future ownership and management of a business. Most business owners know they should think about succession planning, but few actually end up doing so. It is hard to think about not being in charge of the business you have built up, but a proper succession plan can ensure that your business continues long after you are there to run it, providing an enduring legacy.
Here are a few tips to keep in mind when you begin to think about putting a succession plan into place for your business.
- Proper plans take time – often years – to develop and implement because there are many steps involved. It is really never too early to start thinking about how you want to hand off control of your business.
- Succession plans are a waste of time unless they are more than a piece of paper. Involving attorneys, accountants and business advisors ensures that your plan is actually implemented.
- There is no cookie-cutter succession plan that fits all businesses, and no one way to develop and implement a successful plan. Each business is unique, so each business needs a custom-made plan that fits the needs of all parties involved.
- It may seem counterintuitive, but transferring a business between people who are familiar with the business – from one family member to another, or between business partners – is often more complicated than selling the business to a complete stranger. Emotional investments cannot be easily quantified, but their importance is real. Having a neutral party at the negotiating table can help everyone involved focus on what is best for the business and the people that are depending on it for their livelihood.
- Once a succession plan has been established, it is critically important that the completed plan be continually reviewed and updated as circumstances change. This is one of the biggest reasons having an attorney on your succession planning team is important. Sound legal counsel can assist you in making periodic adjustments and maintaining an effective succession plan.
If you are ready to start thinking about succession planning, contact an experienced business law attorney today.