Succession Planning for Business Owners
A succession plan is the process of the transfer of ownership, management, and interest of your business to someone else.
Start with the end in mind. A succession plan should be created as early as possible in the business’s life and like all planning, should change and morph as the business grows and changes. All owners, partners and shareholders should be involved in its creation. This become increasingly important if children become the succession plan.
We created this infographic checklist to be used as a guideline highlighting main points to be addressed when creating and updating your succession plan.
There are 2 sets of events that can trigger a succession plan: controllable and uncontrollable.
Sale: Who do you sell the business to?
- Family member
- Third Party
Retirement: When do you want to retire and how much will you need
Divorce: A disgruntled spouse can obtain a significant interest in the business.
Illness/Disability: If you were disabled or critically ill, would your business survive?
Death: In the case of your premature death, what would happen to your business?
Execution: Because a succession plan is complex, we suggest that a business owner has a professional team to help. The team should include:
- Financial Planner/Advisor
- Accountant/Tax Specialist