An alarming number of business owners do not have succession plans for what will happen to their businesses when they retire, die, or become disabled. Financial professionals expect the demand for business succession planning to grow as the baby boomers continue to age.
When creating and growing a small business, many business owners never think of succession plans. However, all small businesses should have a plan for succession if they want their business to continue on after they are gone.
As with any part of a business, the earlier you create a succession plan, the better your chances that the plan will be successful. With such a plan, you can not only decide who your successor will be, but exactly how the business will be transferred. Moreover, a solid succession plan can assist you in transitioning into retirement.
The first key step to creating a succession plan for your business is determining how profitable the business may be after you are no longer running it. Along with this consideration, consider what steps you need to take in order to keep your business profitable. You also need to think about what your ultimate goals for the business are, whether you want a family member to run the business, or whether you want to sell it to a key employee.