If you own a business, creating a business succession plan is essential. The procedure itself is a document that details how the process of changing ownership works for your business.
According to Business Wire, 70 percent of businesses have a succession plan. However, most business owners with succession plans still doubt the transition process. Continue reading this article if you want to learn more about passing on your business.
Things to consider
Planning for succession is not only for retirement. Savvy business owners have a plan for unexpected situations such as losing a co-owner or incapacitation. Before you start a succession plan, consider how complex your business is. If you are essential for the company to function, you probably need to begin training or preparing successors. You also need to consider your clients. If you deal with clients on your own, you need to have a plan in place so that you do not lose customers when you leave the company.
Succession plans usually have a specific structure. If retirement is close, start thinking about particular dates for the process to begin. However, even if you do not have a timeline, you should still have potential successors. Another critical part of the succession process is creating standard operating procedures. Work with your managers and executives to develop a formal document that anyone can pick up and read.
Whether you want to sell, retire or plan for the unexpected, creating a business succession plan is vital for intelligent business owners. Do not wait until it is too late. A plan gives you peace of mind and improves your company’s value.