Far too many business owners never think about succession planning until it’s too late. They assume it’s too far off in the future or are too busy with the day to day tasks of running a business to factor in business succession planning. However, running the business and planning effectively are not mutually exclusive.
A recent survey of more than 200 different privately held businesses revealed that nearly 60% of small business owners who participated had no succession plan in place. While owning a small business is an exciting prospect and one that requires a lot of your time, putting family members and other stakeholders in the business in the difficult situation of trying to respond due to your sudden incapacity or death can be extremely difficult. Early planning can give a lot more flexibility to owners to work in whatever capacity they chose in the future.
Succession planning is about more than just ownership and control. There are training issues, tax concerns and the establishment of an exit strategy if there is no current employee or relative willing and able to take over. With businesses that have multiple locations and many employees, it can be very difficult for family members to suddenly step into a role they never wanted.
Many family owned businesses are not passed down to future generations despite the fact that the owner of the business might expect this. Plenty of people who own a business don’t even have their individual estate plan in order, making it all the more difficult for them to be able to put together the next steps to take when the business has to inevitably shift because of changes in one person’s life or business goals.
The support from a lawyer is crucial for anyone who is contemplating going through the challenging situation of meshing your current business operations with future goals.
Skipping your long-term succession plan might seem like a good idea because it will be a long time before you have to worry about these issues, but that’s not always the case. Your loved ones will be the ones dealing with these concerns if you don’t have a plan in place to protect the future of the company or your family members. They deserve to have clarity and to be able to move on with business or personal interests if something happens to you.