When it comes to looking years down the road in your business, one of the most important things you can do is to plan early. Starting now allows you to understand all the key issues while also building in time for training and flexibility.
Most business owners do not anticipate their own exit, whether it’s through retirement or other reasons, such as disability or divorce. This can prove problematic for the entire company, not just the owner. This is because the transition of a business should be planned well in advance with careful consideration given to who will take over the major management aspects of the company and other responsibilities.
A business owner usually has the mindset that he or she will be in the chief role for many years to come, but he or she may naturally tire of the responsibility or need to depart suddenly. Without any forethought, this can lead to scrambling to choose the right person.
Aside from planning ahead for the transition of staff and the right training time for someone to step into bigger roles, there may be tax consequences related to how the business is handled, too. The critical documents for the business, like a buy-sell, may also outline what is and is not allowed. Anyone who could potentially be impacted by a business owner leaving should be thinking about the role of business succession.
It might seem like it’s too early to plan for departure, but it’s far better to accomplish these conversations earlier rather than later. No one expects to suddenly depart their own company, but failing to even consider the option could lead to conflict and confusion if the event does happen.
The right lawyer can help you understand the role played by business succession planning and why it should be incorporated into your business strategy as soon as possible.