Business Succession Planning

The truth is, business succession planning is risk management. It is wealth preservation. It is being responsible. You have many people relying on you – your family, employees, customers, investors, creditors, etc. All of these parties are affected if you don’t properly plan.

So when is the right time to start planning? Ideally, the best time to document your business succession plan is when you start the business. “Begin with the end in mind,” as Stephen Covey says. Plan for the unexpected events when you start the business. However, most owners fail to do this because they are consumed with and focused on building a successful business.

However, if you’re like most business owners – knee-deep in the daily operations and project planning – the next best time is: now. Now that you have built a business that has value, it is time to protect that value. You’ll want to protect all assets, tangible and intangible. Take a moment to evaluate experienced, key employees. Ascertain the fair value of your ownership should something happen to you. Assess your key agreements with customers. Communicate plans with shareholders. All of these steps will protect owners and safeguard the business. This is the essence of succession planning. 

RELAX BEFORE YOU RETIRE

While most of our clients start business succession planning at the point in their life when they are considering retirement – generally less than 10 years from a planned retirement date – statistics show that exiting business owners fare better when they have a documented business succession plan long before they are considering retirement. They typically can enjoy a more prosperous business exit and retirement lifestyle.