A business succession plan is where business and estate planning intersect. If you own a business, you must have a plan for how it will run without you. If something were to happen to you unexpectedly, would the company continue in your absence? Even a significant majority of family businesses don't make it beyond the second generation of ownership.
Regardless of your plans for leaving the business, at some point, it must happen. Whether your aim is to allow something you have built to live on or ensure your business can keep running in your absence for your employees' sake, then you owe it to yourself and them to create a business succession plan.
Things To Consider
Take a look at your timeline. Are you planning on exiting the business at a specific time or age? Or maybe you intend on phasing yourself out over time while assisting in a transfer of leadership? Despite your intentions or answer, you can begin the process by choosing a successor.
Because you understand the value and heart of your business, you can bring these to an estate planning attorney. There, you can begin to outline and implement your business succession plan. It addresses everything about how the business will pass to someone, any tax ramifications of your plan, and additional contingency arrangements to address any outstanding variables.
If this is a family business, you have the ability and time to communicate the details of your succession plan with those closest to you. Family businesses have emotional elements to consider.
Benefits To You
Beyond its ability to protect your business and the people within it, a well-crafted succession plan may be a key component of attracting outside investors. In addition, it could aid in the retention of talented leaders. They may know their skills will play a critical part in the future of the business.
If you are committed to establishing a succession plan, give yourself the appropriate amount of lead time to create one. As mentioned earlier, there are discussions to be had with future leaders, training for successors, and even training for others should you need to choose someone else eventually.
Hamilton Law, PLC
Hamilton Law, PLC is an experienced team of attorneys who cater to various business law and estate planning needs. If you have further questions about either of these practices, contact us to schedule a free consultation. Together, we can generate a customized approach to supporting your business, protecting your assets, and creating the required documentation.