Starting your own business is a dream for many people today. What can start as a simple idea can turn into your main source of income and, when set up properly, a dream come true. What many people don’t always consider is what will happen to your business when you’re ready to step down or what will happen if you die or become incapacitated. That’s why succession planning for your business is crucial—no matter if you’re just starting your business or are already operating as a business owner.
In this article, I’ll go over the steps you can take today to begin creating a strong succession plan for your business and how you can set up a call with me to learn more.
Understanding the Importance of Business Succession Planning
Succession planning helps ensure that your business can continue to thrive even after you’re gone. Your succession plan will lay out the next generation of leaders to take over the business. This is important as a business owner because you can directly appoint board members, management appointments, and other key individuals for your business. These chosen individuals will know exactly how to operate your business the way you intended and can ensure the legacy of your business continues on after you’re gone.
The last thing you want as a business owner is to put your business into the hands of someone who could potentially destroy all the hard work you’ve put into your business over the years!
Start Early
It’s never too late to start planning for the future. Even if your business has been in operation for years, you can make your plan now and not delay the process any longer. Succession planning isn’t just to have something in place for when you die—if you become incapacitated due to an accident or health issue, your business could come to a halt, or worse, crash completely. Getting your succession plan together now will ensure that your employees, managers, and board members will know exactly what to do in the event of your incapacity or death.
Identify Potential Successors
The people you appoint to run your business in your absence should be people that you trust and you believe share the same values as you when it comes to your business. While it may be tempting to name your children, spouse, or friends as successors, if they don’t share the same vision as you, or are unable to execute your wishes exactly as you have laid them out, they may not be a good fit for a business successor—so choose wisely! Identifying potential successors now can also alleviate any disagreements between employees during an already stressful and emotional time. Once you have your potential successors are identified, create a development plan to equip them with the necessary skills and knowledge. This might include mentorship, formal training, or gradually increasing their responsibilities.
Communicate The Plan
Clear communication with stakeholders, including employees, family members, and business partners is crucial. Ensure everyone understands the succession plan and their specific role in the transition. Communicating that you have a succession plan in place ensures that every individual that is connected to your business is aware of the potential changes that will arise if something were to happen to you or in the event of your death.
Consider Legal and Financial Implications
When you work with me, we’ll work together to address any issues such as ownership transfers, tax implications and estate planning. This is particularly important for women and second-career individuals who may have unique financial considerations. We can look at any plan that you may already have in place and ensure that it still works for your current needs and what you may need in the future.
Review and Update the Plan Regularly
Business environments change, and so should your succession plan. Regularly reviewing and updating the plan to reflect changes in the business, industry, or personal circumstances keeps the plan fresh and can match the needs of you and your business.
If you don’t have a business succession plan in place, you’re leaving your business up to chance if something were to happen to you. Don’t risk losing your hard-earned business to the State’s plan, book a call with me today to learn how to get a solid plan in place today.