Even if the future of your business doesn’t include you or other family members, it’s worth planning for. Working with someone who understands the issues at play in business succession and business valuation is important for protecting the value of your organization. The sooner you can find a financial professional to help you, the better.
There are many components to creating a comprehensive business succession plan, but one that is often overlooked is valuing your ongoing business. If you don’t intend to step down from the company or sell it in the near future, it’s easy to overlook this as a crucial step.
Even if an owner is not contemplating an immediate transfer of a business or a sale, a professional valuation of the business can help to identify potential strengths and weaknesses that could all be incorporated into a business succession plan.
A proper business succession plan means thinking ahead about the future and also the other key people who may need to be involved in your business in order to help this company survive in the future if and when you do decide to depart.
A highly valued business could also generate estate tax ramifications that require advanced estate planning opportunities. Finally, a credible valuation could be vital for attracting key employees or even obtaining a loan.
You can think at a broader level about operations, business planning, marketing, legal and personnel when you have done the necessary legwork to value your business and have documented how this has potential impacts for your business succession plan as well.