Business succession planning is a necessity for small business owners and entrepreneurs of all flavors. Arranging your affairs in preparation for a successor ensures that you can smoothly exit the company when you decide to retire and also prevents a worst-case scenario for the business if tragedy suddenly strikes.
CNBC reports that 67% of Americans do not have a will, and for business owners that entails significant uncertainty for the future of the enterprise. By knowing what to consider when choosing a successor for your business, you can take steps toward safeguarding the company in the long run.
Will you keep the business in the family?
Tradition and business often go hand-in-hand. If your business comes from your parents, or if you wish to start a tradition of your own and help keep your loved ones financially secure, then passing the business on to a family member might be a natural choice.
Who will take the business in the right direction?
It is important to have serious discussions with family members and other candidates to determine who might have the willingness to take over the business. Drive, knowledge and disposition are all essential qualities in a great leader.
How can you allow for a smooth transition?
Your estate succession plan should allow for you to act upon your wishes for when and how you intend to exit the company while also accounting for the unexpected. Make sure the tools are in place to empower your successor to lead the business successfully.
Naming a successor for your business can cause some contention within the family or company. However, it is crucial that your business succession plan serves to guide the enterprise in the direction you see fit above all else.