If you are a business owner, you undoubtedly have a lot of responsibilities on your plate. While it is easy to focus on your day to day responsibilities and growing your business, it is also important that you think about the future of your company. If something should happen to you and you are unable to keep working, you do not want the business to have to close down as this would not only impact you and your family, but also your employees, vendors, and others. This is why effective business succession planning should be in place for all established organizations. The following tips will help you to establish a good succession plan and keep it updated over the years.
Plan for All Your Responsibilities
Business owners truly put their blood, sweat, and tears into their company. They often do far more than just the traditional activities associated with running the business. When thinking about succession planning, it is important to consider all your responsibilities to ensure they are transitioned to someone else. In many cases, it is unreasonable to try to transition all the work you do to a single individual who will be taking over the business. Planning for how all your activities will be handled when you are gone is critical.
Succession Plans for More than Just the Owner
For small businesses, a succession plan will often just mean deciding who will take over the ownership role of the company when you are no longer there. As a business grows, however, other roles become essential to the success of the business. Make sure you think about every position within your company that is critical for operations and have a succession plan in place so that you can avoid disruptions should that person leave the company.
Involve Your Successor
One of the biggest mistakes people make with succession plans is assuming that your successor will want the job. This is especially common with family run businesses, but can happen in any type of company. Do not assume that your child or someone you have been mentoring for years will want to take over the business. Instead, ask them if that is what they want and let them know that you want to help them grow into that role.
Keep Your Succession Plan Up to Date
Succession planning is not something that you can draft up once and then forget about. As your business changes, and as people come and go within your business, it will be important to modify the plan. A good rule of thumb is to review your succession plan with every major change that takes place with your business, or annually, whichever happens more often.
Streamline the Transition with Legal Preparation
Planning out who will take over your company is a great first step. In an ideal situation, you will be able to engage in a phased transition to the new head of your company so that there is no disruption to the business. If, however, you pass away or become incapacitated unexpectedly, the succession plan will need to be activated instantly, which can make it much more difficult.
One of the biggest challenges for the new leadership will be transitioning the legal ownership and rights to the company so they can make important decisions. This is why having an attorney help draft up things like transfer of ownership, power of attorney, and other documents should be a part of your succession plan. Contact ElDeiry & ElDeiry, P.A. or call us at (954) 670-2800 to schedule a consultation and learn how we can help you with your business succession plan.
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