You worked hard to build your business from the ground up. You believe that success has the potential to span generations. The last thing you want is to see your legacy vanish once you're no longer able to lead the business.
So how do you ensure the long-term success of your business - beyond just your own lifetime? The answer lies in careful planning.
What is business succession planning?
Put simply, it's about planning for the future of your business. Part business and employment law, part estate planning and part financial planning, it's an essential step for small businesses of all kinds.
Business succession planning involves thinking about your long-term goals. Do you want to pass the business on to the next generation? Transfer ownership to someone you trust? Cash out and sell it? Your answer will shape the overarching strategy for your succession plan.
Why it's necessary
Far too many business owners focus solely on short-term or the here-and-now. And that's understandable; running a successful business requires staying on top of the countless issues that come up on a daily basis.
However, it's also important to set aside time for planning ahead. You'll need to identify how your goals for the future impact your current decisions. For example:
- Who will "inherit" the business? Do they have the experience and know-how to ensure a smooth transition?
- If you're thinking of selling, how can you put your business on the best footing now for a good price down the road?
- Do you need to restructure your business so it's more easily transferable?
- Are there existing liabilities you should tackle before moving on with next steps?
Without planning ahead, you may find yourself with limited options - or, even worse, your business could fail entirely.
How to get started
Business succession planning can be complicated, even if you have a relatively small and straightforward business. It's best to work with an attorney who will take the time to understand your business as well as your goals.