It can be considered a great achievement to start, own, and run a business. It’s a source and sign of financial stability and freedom that not all have. However, while your enterprise may be set up to run indefinitely, you aren’t. You might suffer from an illness, or you might die suddenly, leaving your employees, partners, and family behind. What are they going to do after you go? Give the people left behind their much-needed reassurance by creating a business succession plan while you’re still alive and well. Ask these questions to guide you through the process.
What Will Happen After You Go?
This is the main question that you need to answer with your business succession plan. You need to decide on what will happen immediately after the time comes for you to let the company go. In line with this, it’s good to invest in a life insurance lawyer and life insurance now. The death benefit on your policy can be used as additional capital if you die while running the company. Your attorney can help you with your plan by providing legal input on it. They’ll also be the one to assist the successor in executing it as well.
Who Will Be Named Successors?
Often, when someone leaves the business, the ones left behind fight over who will succeed it. This is especially true when it’s a family business or when the exit is sudden. It’s best to be able to name specific successors in order to avoid this kind of squabble. In case of siblings, you can even assign specific positions or areas that they’ll be in charge of. That way, it won’t seem as unfair for any one of them.
Are There Provisions for the Transition?
It can be overwhelming for the successor to suddenly have full control of the business from the start without any experience or assistance. What you can do as the current owner is to place measures that will help everyone transition. For example, you can assign someone to assist the successor in their first few years. Or you could choose to let them take control of a little at a time, assigning the remaining parts of the business temporarily to someone else you trust.
Will It Be Able to Adjust?
Sometimes, what you’ve planned out long before any succession happens won’t be applicable when the time is near. For example, you might have made the plan for a single successor, but there are many potential candidates. Or the person you’ve chosen actually doesn’t want to anymore. In this case, you need to be open to making changes to your plan while you’re still around. You can also set provisions in your plan for what will happen in case of alternate situations.
Creating a business succession plan is very much like planning your estate, but specifically involving your enterprise. It may take quite a bit of effort on your part, but it is a must if you want your company to last a long time and provide for your family. It will also help maintain peace among your employees and business partners when you go.
