Starting a business can be overwhelming, but you have to look at every aspect of the business when you decide to run your own. Whether you decide to open a small family restaurant or have plans to run a giant corporation, it is important to think about the future. After working your whole life to create a business, it should be important to you that the business runs smoothly when you are no longer capable of running it yourself. A business succession plan helps to prepare you for who will continue running the business you started when you either have passed on or decide to retire. Here are four tips to think about for the future of your business.
1) Start business succession planning early.
Five years in advance is good. Ten years in advance is better. Many business advisors tell budding entrepreneurs to build an exit strategy right into their business plan. The point is, the longer you get to spend on family business succession planning, the smoother the transition process is likely to be.
2) Look at your family realistically and plan accordingly.
You may want your first-born son to run the business, but does he have the business skills or even the interest to do it? Perhaps there’s another family member who is more capable. It may even be that there are no family members capable of or interested in continuing the business and that it would be best to sell it. Examine the strengths of all possible successors as objectively as possible and think about what’s best for the business.
3) Train your successor(s) and work with them.
How can you expect your successor to take over and run your business successfully if you haven’t spent any time training him or her? Your family business succession plan will have a much better chance of success if you work with your successor(s) for a year or two before you hand over the reins. For solo entrepreneurs, sharing decision making and teaching business skills to someone else can be difficult, but it’s definitely an effort that will pay big dividends for the business.
4) Get outside help with your business succession planning.
Lawyers, accountants, financial advisors – there are many professionals that can help you put together a successful succession plan. There are even companies that specialize in family business succession planning, who will facilitate the process of working through both family and succession plan issues.
Giancarlo Estrada is an Arizona attorney who is capable of helping you with the legal aspects of creating a business succession. It is important to always plan for the future. Planning for the future of your business is important not only to the success of your business, but also for your peace of mind.