If you are a business owner, you have a thousand things to think about. But it is inevitable that one day, you will be unable to run the business anymore. Whether that’s because you want to retire at a certain age or because you are involved in an accident or die prematurely, you need to put some thought into how the business will run when you are gone. This process is called business succession planning, and it’s something that business owners don’t take seriously enough.
Why Have A Business Succession Plan?
If you are running a business in any faculty (on your own or as part of a partnership), your death will have an impact on your business. If you have no plans in place for the succession of your business after your death, your share of the business (whatever that may be), will be put into ‘intestacy’. This means that only your family or close relations can act in your stead, or it might even mean your share of the business is passed to the state. Either way, you have no say in what happens to your business once you’re gone. But what’s best for your business isn’t always to be handed down to the family – in fact, that usually creates more problems than it solves. But if you have a succession plan in place, you have full control over what is done with your business.
Some Things To Bear In Mind:
Business succession planning isn’t the simplest thing you will do, and the bigger the business the more complicated it tends to get. To help you understand the process and what you need to do, we have a few tips for you:
Plans Take Time:
Proper business succession plans – the ones that will truly stick – take months or even years to put together and pin down. They take a lot of ongoing planning and development, with many steps involved before they are ready to be implemented. For example, you may have someone in mind that you want to take over, but they aren’t ready. You may need to start investing in training and development for that person, which is best done way before a need is there. It’s never too early to think about who will take over your business.
One Size Doesn’t Fit All: Unfortunately, there is no one solution to business succession planning that works for everyone. There is no template, and no one proven way to develop a successful plan. Instead, you need to plan for the unique practices and environment that make up your business, creating a custom business succession plan that suits all parties involved.
Regular Reviews Are Key: Once you have established your succession plan, you need to make sure it is kept up to date. Businesses are dynamic, rapidly evolving entities, which means if you leave the plan alone for a few years, it might not be applicable when it’s needed. Make sure you are reviewing your succession plan at least annually to ensure it is still relevant, and update it if circumstances change.
You Need To Commit: Succession plans are a complete waste of time if they are just a piece of paper with no action behind it. So, talk to professionals, business coaches and accountants who can help you understand all of the elements of change involved in business succession.
At Edmunds & Eve, we work closely with business owners who want to plan for the future success of their business both during and after their time within it. We can help you understand what will happen to your business in the event of your death, and what steps you can take to ensure your business is thriving and successful for years to come. For more information, or to book your consultation, get in touch with us today.