If you are a small business owner, you may be so busy running your business that you haven’t put a succession plan in place.
This lack of a plan is probably something you want to address After all, lack of a plan can make it difficult for a business to continue after something happens to the owner.
In this post, we will touch on some of the key points to consider in crafting such a plan
If you lack a succession plan right now for your business, you’ve got plenty of company. Nearly 7 out of 10 small business owners don’t have them, according to figures from the U.S. Small Business Administration (SBA).
In many cases, this is because small businesses are family businesses. And family businesses are often inattentive to the need to formalize their arrangements.
But if you own such a business and something happens to you, you don’t necessarily want it to take your business down too.
That is one key reason why it is important to make plans now about who will take over for you and how the business will be structured.
It is also important to consider how this arrangement could affect your estate plan. For example, if you have multiple children, those children may have differing levels of interest in becoming or remaining involved in the business.
If a child does not want to be involved in the business, you could pass along other property to that child in your estate plan. But if a child is interested in being involved in the business after you are gone, it might make sense to include that fact in a formal succession plan.
Of course, a lot also depends on how your business is structured. Sole proprietorships, partnerships, limited liability companies and other entities all present particular issues and challenges.
That is why, when considering your succession plan, it makes sense to talk with an attorney who is knowledgeable about business and commercial law.
Source: Forbes, “How To Write A Business Succession Plan,” Natashah Torki, May 14, 2014