Business Succession Planning

Introduction to Succession Planning

How do I pass my Business on to my children?
How do I sell my business?
What will happen to my business if I become sick or die?
How can I ensure that I get the most from the sale of my business?
How do I pass my business on to my children and still have enough money to retire?
Will my children be ready to run my business when its time?

Business Succession Planning answers these and similar questions regarding the transition of a business from the current owners to new owners or management.  Every business will be confronted with the issue of ownership and management transfer but for many reasons, business owners often fail to address the issue.

Sometimes the owner simply does not know what options might be available.  Other times the business owner is unsure of how to achieve his or her goals.  And sometimes the business owner simply does not want to address these challenging questions.  Unfortunately, ignoring the question of Succession Planning and simply hoping for the best often leads to catastrophic failure.  A sound Business Succession Plan will help ensure that you achieve your goals.

The Succession Planning Process

  1. The first part of the Business Succession Planning process addresses an owner’s goals. Do you want to transfer your business to your children?  Would you prefer to sell your business at your retirement? Would you prefer to continue to own your business but have it managed by others? By understanding your options and focusing on what you want to achieve you will have a much higher probability of a successful final outcome.
  2. Like all business planning, the second step in the process involves the development and execution of a plan to achieve your goals. If you intend to sell your business the Business Succession Plan will include steps needed to enhance the value of your business and to prepare your business to be sold at the appropriate time. If your plan is to transfer the business to your children, the Business Succession Plan will include taking steps to ensure that the next generation is prepared for business management. If your plan is to retire but continue to own your business, the Business Succession Plan will include taking steps to ensure that the business can run profitably and successfully without the day to day attention of the owners. Another critical element of a sound Business Succession Plan and something that must be considered is the provision for emergency succession in the event of the untimely illness or death of the owner. Ensuring that the company has the management and other resources in place to maintain the viability of the business even if the owner is suddenly unable to run the business.
  3. The third part of the succession planning process involves the implementation of the elements of your plan. Unless your plan is put into action, the process has little chance of resulting in a successful outcome for you, your family and your company.
  4. The fourth and final part of the succession planning process is complete when the ownership and/or management of your organization has been successfully transferred from you to someone else.