Admittedly, it’s a number that you might find astounding. Did you know that the United States Census Bureau reports that over 90% of American businesses are family owned? Even if the statistics don’t take you by surprise, there’s something you should know. You can prepare plans for business succession – and it will make for a better transition for your company.
No doubt a lot of sweat equity goes into establishing and building a business. For sure, this could be true in a literal sense. If you’re a plumber, electrician – or construction worker, you most likely put in many hard hours of labor.
Meanwhile, just because you’re not engaged in physical work, doesn’t mean you feel any less amount of stress and/or dedication to your profession. You could own a car dealership or grocery store. Of course, there’s also the chance that you head up a professional accounting firm or real estate office – and your successors will need to have appropriate licensing credentials.
As a business owner, you want to make sure your brand continues to prosper under successor leadership. This is critical no matter the reason you leave the company. The beauty of it all? You have the opportunity to set up a business succession plan that will least disrupt your operations.
Business Succession Plans
First and foremost, you should really understand the definition of a business succession plan. When it comes down to it, the process involves identifying leadership to take over when you are no longer a part of the company. As you may already know, there are three basic reasons business owners generally need successor plans:
- Health Issues
Business succession plans require a great deal of consideration. All things considered, it makes sense to start with a goal. When you consult with an experienced business law attorney, expect to answer questions as to what you hope to accomplish in setting up succession planning.
Does part of your plan include income continuation after you leave the company? What about your involvement? Even though you’re leaving, you may want to contribute to business operations. Are you planning on taking out all of your company investments and never looking back?
When many people think of business succession, their entire thought process often turns to legacy appointments. If you are a licensed professional such as accountant, lawyer or real estate broker – you are bound by professional rules that impact your choices. In some cases, this may make your selection regarding leadership transition a more straightforward process.
Just about everyone knows a story about a successful business that was run to the ground when a child or sibling took over. Although the concept is frightening and disheartening, there is something you can do to avoid the same issues. Business owners may plan for their successors – and pass on key positions to the people who will handle them the best.
In summary, a well-written business succession plan establishes goals and hopes to take the emotion out of what should be a smooth transfer. Without one, family disputes can result in the death of a prospering enterprise.
Are you a business owner? Have you thought of business succession planning? Contact the Law Offices of Lawrence M. Centanni to see how we can help you with this critical process.