Most business owners in Massachusetts not only want their companies to thrive while they are in control, they also want their hard work to continue to benefit their families and employees after they are retired or pass away. For these reasons and numerous others, savvy business owners establish succession plans.
Why is it important to have a business succession plan? As the Houston Business Journal points out, small business owners establish their succession plans to help fund their retirement, as a contingency plan in the event of an unexpected disability or to ensure the company can continue operating after their death. Despite the importance of planning for a company’s longevity, only about 25% of small business owners have such a plan in place.
What exactly is a business succession plan? This strategy details the transfer of ownership or management roles to other family members, employees or outside parties. Those with experience in the field suggest the following steps for establishing a strong business succession plan:
- Create a plan well in advance of an unexpected disability or untimely death.
- Seek legal counsel, as well as the advice of a financial advisor and an accountant, when creating a succession plan.
- Wisely choose a successor based on his or her abilities, experience and desire to advance the company.
- Give employees and others time to adjust to the transition.
Creating a business succession plan may seem complex and overwhelming. This may be why many small business owners delay this important step in their company strategies. However, with experienced counsel, establishing a succession plan should not be overly difficult.
