Whether your business is a start-up or has been in the family for generations, it is extremely important to have a business succession plan in place. Do you want your business to end with you, or do you want it to be passed down to someone? It is important that these types of decisions are made and documented before it is too late.
What is a Business Succession Plan?
A business succession plan is an exit strategy that plans what happens to your business in the event of your death or incapacity. What are some options? You can either decide on transferring the business to one individual, several individuals or wind it down in the event of your death. Whatever your wishes, it is important to plan ahead and implement the right structure as soon as you decide.
What to Include in a Business Succession Plan?
While all business succession plans are customized to each business, there are several of things that we recommend you take into consideration when planning:
- Deciding on a timeline: A succession plan can go into effect either immediately after death or on a pre-determined date and time. It is important to think about this in advance.
- Choosing a successor: If you decide to pass the business down to someone else it is important to have your successor chosen and documented ahead of time. Doing this will allow you to be certain that ownership will be transferred to them.
- Provide an outline of how your business runs: This can be provided in the form of a document, company handbook, a book of standard operating procedures, or however you deem necessary. It is important to have a layout of your business day-to-day functions that any future owners or staff can reference, if needed.
- Determine any regulatory requirements: You need to ensure that you succession plan accounts for any additional federal and/or state regulatory requirements on your business operations specific to your industry.
- Determine the Value of your Business: It is important to regularly have your business evaluated. Doing this will ensure that if you decide to sell the business, you will be getting paid its true worth.
Contact Astria Law Group to Start Your Business Succession Plan
It is a common misconception that planning for after-life arrangements is complicated and extremely expensive, but that is not the case. It is never too late to start the process and doing so will make things much easier for your family and assure your business gets handled the way you want it to. However, the earlier you start planning the better. Our experience attorneys can help you with your legal documents as well as your business records and policies. Contact us today to discuss the first steps in creating your business succession plan.
