No entrepreneur wants to think about a future in which they are not involved in their business without that being their own choice. It’s smart to hope for the best and prepare for the worst but recent studies have shown that far too many entrepreneurs and business owners are hoping and preparing for the best instead.
Research from the National Association of Corporate Directors showed that two thirds of private and public companies had no formal succession plan in place for their CEOs. As a business owner you know that proper plans and structure have a key impact on your ability to thrive.
Since the future is unpredictable, the consequences of failing to institute a formal succession plan could end up harming your loved ones and your business. Three tips to make business succession planning easy include:
- Don’t procrastinate and instead think carefully about other options if it falls on you to leave the company, such as disability or divorce.
- Identify a successor for who can step in to provide continuity if you are no longer involved in the business.
- Identify the current value of your business, preferably with an objective third party so that you know where you’re working from and the different stakeholders who might be involved if you were to step away from the company.
Sitting down with the right attorney can make a big difference in how you approach and accomplish business succession planning.