As a business owner, you never seem to run out of work to do.
Whether it’s meeting customer needs, managing your employees or upgrading your company’s services or location, you always have a task that needs attention.
But once you’ve launched your business, you need to add one more item on your to-do list: establishing a business succession plan.
If you are a busniess owner, and have no clear successin plan in place, contact Bashain P.C. as we can walk you through this often comlex process stp by step.
Why is a business succession plan important?
If you operate your business on your own, run a family business with other family members or have a dedicated business partner, establishing a business succession plan will allow for a smoother transition of business ownership in the event of your death.
Having a business succession plan in place ensures that someone will be ready to step in to run your business and help settle your estate more quickly. Also, as you get older, making sure you have completed a business valuation periodically will let a business partner or future successor know what amount of money will be needed to buy out your share of the business.
Who should be your business successor?
Making the choice as to who will take over your business upon your death isn’t easy. First, you need to evaluate who is most interested or who has the largest stake in your business. Is it an heir or business partner? A key employee? An outside party?
You may want to make a list of who might want to buy the business and ask the top candidates how they would feel about becoming the business successor. If you have more than one heir involved in running the business, often choosing one heir is a better option than picking multiple owners—unless one person will focus on sales and another on other business operations.
If you think you will need to find an outside party to run your business, work to sell your business before you pass away. Have a strong general manager and solid operating procedures in place to keep the business afloat after the sale.
Also, all business succession plans include a buy-sell agreement, which can establish how to fund the business’ sale.
According to USA Today, 58% of small business owners have a no succession plans. Don’t put your business in a lurch. A business law attorney can help you draft a solid business succession plan sooner rather than later.