Handing Over The Reins: All You Need To Know About Business Succession Planning
Being successful in business is often down to good planning as well as having a solid idea that is able to generate an income for you, and it also helps to have a strategy for when you are going to hand over the reins.
Business succession planning is something that ideally needs to be implemented into your startup plans, and you could use someone like knowledgeable Orlando business lawyer John Samaan, to cover all the angles on that score.
Even if you already have a business up and running but don’t have any succession plans in place, it is not too late to create something that will make the process of handing over the reins, a whole lot easier.
The need for an exit strategy
It is perfectly understandable that if you talked to a fair number of business owners, they would probably say that they have been far too busy building up their business and putting in the hours to make it a success, to stop and think about something so far off as an exit strategy.
Even if you take the view that creating a succession plan is a painstaking process, which it doesn’t have to be as it is best to get professional help to get it done anyway, you will one day reach a point where you have decided to move on, and then realize why it would have been a good idea to find the time to set out a framework for achieving your aim and a fair price.
It is also important to appreciate that a succession plan is not just about documenting the nuts and bolts of how and even when you hand over the reins, it is also a document that helps to ensure that your business survives and is able to prosper after you are no longer in charge.
If you meet an untimely death for example, or become too ill to continue working, these are scenarios that are catered for in a business succession plan. Without this paperwork in place, the business you have worked so hard to build, could face an uncertain future.
A good way of transferring ownership
Another positive aspect attached to a succession plan is the fact that it allows you the opportunity to create a blueprint that clearly defines how you want to transfer your business to the next generation of owners.
If continuation of what you have built over a number of years is something that definitely matters to you, one of the best ways of ensuring that this legacy is able to continue without disruption, is to take the time to set out a business succession plan.
Cover all the angles
You may well have firm ideas about what you want to happen with your business at a later date, and a lot of small-business owners do tend to make the assumption that their children will want to take over the business at some point.
It is disconcerting to discover just how often the children of business owners don’t have the same ambitions and want to make their own way in the world that doesn’t involved running a company that has been handed down to them.
Whatever you think about that, it is a discussion that needs to be had, so that you at least have some contingency plans in place regarding what happens to the equity stake, especially if your kids don’t want it.
It might be that you may want to include the option of transferring ownership of the business to key employees, or at least give them an option to acquire the business when the time comes.
There are numerous different scenarios that could play out, but one thing that many businesses don’t cope well with, is uncertainty, which is why you need to cover all the angles and have a plan in place.
Nothing is forever
The fundamental point to take on board as a business owner is that nothing is forever and there will come a point sometime in the future where something will need to be done in order to transfer ownership of the company.
The circumstances that lead to that situation will vary greatly but one thing that doesn’t change is the fact that if you are a business owner, you really do need to consider how difficult things could get, if you don’t have a succession plan to take care of the details.
Michael Francis is a business consultant who has experience getting start-ups off the ground, managing smooth successions and everything in-between. His invaluable business articles appear around the net.