Sweat and actual equity go into the creation of any business. That hard work often pays off in a successful and highly profitable enterprise.
Diligence and dedication do not end with a thriving company. Proactive steps are essential as well, particularly when it comes to succession planning. In addition to preserving the current business, you want to provide an orderly transition to ensure stability, whether you sell or have loved ones take over.
Emerging from a worldwide pandemic where business disruptions were the rule, not the exception, makes creating a business succession plan a top priority. Regardless of plans for the future, putting the operation in someone else’s hands is unavoidable. Taking control of that process now can make things easier should an unexpected death occur without a named successor.
Business succession plans focus on the business owner who wants to exit at a specific date or remain involved with minimal responsibility without altogether leaving. Regardless of the ownership status, an effective plan should account for the following:
- Anticipated date of the transition
- Implementation of the plan while providing for contingencies
- Identification of a successor or successors
- Assessing the business value
- Tax planning
Business owners are not immune to human nature dictating that there will always be time to implement a succession plan. Daily operations keep them far too busy to transition to something that has little bearing on current revenues. Delays often occur when a business needs help to make ends meet. The priority, then, is survival.
Help from an experienced business attorney skilled in this complex aspect of business continuity planning can mean the difference between chaos during difficult times or smooth transitions toward continued success.