The Why’s and How’s of Succession Planning 

As a business owner, it can be hard to think about a time when you are no longer involved in the business. After all, you have probably spent countless long hours developing your business and making it the success that it is. However, it is crucial for every business owner to consider what will happen to the business if they retire, sell the business, become incapacitated, or pass away. Having a succession plan in place is essential for preparing your business to transition smoothly after you move on.

Planning for Your Business’s Future in Advance

Whether you are nearing retirement age or plan to maintain an active role in business for decades to come, it is never too soon to think about succession planning. When a business has no succession plan and something unexpected happens, invaluable information may be permanently lost. There may be substantial disruptions in business processes that result in lost customers, reduced profits, and permanent harm to the business’s reputation. By getting ahead of the curve and preparing for the future, you will save your business from unnecessary damage during transitional periods.

Choosing a Successor Who is as Committed as You Are

A major part of succession planning involves considering who should take over when you are ready to step away from the business and how they can best be prepared to do so. Your successor may be a current employee who has shown potential for leadership, a son or daughter, a business partner, or any other person who you feel is qualified and capable of taking on the responsibility. The important thing is that you have a plan in place so that your chosen successor has the resources they need to take over when the time comes.

Ensure that there are ample training opportunities and resources available for your successor. The more they understand the business, the better equipped they will be to maintain its success. This could include having them shadow you as you do your work, providing them with detailed written instructions and processes, or connecting them with industry advisors that can give insight into relevant topics.

Maximize Efficiency and Ensure Compliance

Succession planning is a great opportunity to evaluate your business practices and procedures. What areas need improvement to reduce wasted time or resources? Can you automate certain processes to make the company more efficient? Are there areas where you can streamline operations by combining tasks or outsourcing responsibilities to a third party? Are your policies and procedures compliant with industry regulations and standards?

Contact Our Naperville Business Law Attorneys for Succession Planning

Our Naperville business lawyers know the value of succession planning but also recognize that choosing a successor and setting up a succession plan is easier said than done. We can provide the assistance and legal guidance you need. Call our skilled team at 630-756-1160 for a confidential consultation.

Source:

https://www.sba.gov/sites/default/files/files/PARTICIPANT_GUIDE_SELLING_SUCCESSION_PLANNING.pdf