Small business owners face challenges on a day-to-day basis; daily business operations take priority for business owners, and less Immediate issues, like succession planning, fade into the background.
As a business matures, and owners start thinking about retirement, they often realize that they lack a formal succession plan. The fact of the matter is, owners should start succession planning early and periodically review and update for relevancy.
A proper succession plan typically starts with a disaster plan, detailing the owner’s wishes in the event they have an unexpected death or become permanently disabled. This plan should include the options to:
Another important consideration is determining the value of the business, and having a periodic business valuation performed to determine the fair value of the company – often a business owner’s largest personal asset.
Once you have a succession plan in place, you can plan for the future, while you focus on the daily obligations of running the business.