Help Your Business Succeed With a Succession Plan

When you’re starting your business, you’re not likely envisioning a time when you won’t be playing a critical role. However, the reality is that 75% of entrepreneurs exit their businesses within 10 years. They sell, retire, or hand the leadership role over to a successor so that they can explore new opportunities or enjoy their hard-earned wealth.

Planning is critical to a successful transaction. In this article, we offer some tips for smart succession planning and explain how a Florida small business lawyer can help you get your enterprise ready for the future.

1. It’s Never Too Early To Plan

Like we said at the beginning, you probably aren’t thinking about your eventual exit when you’re starting your business, but it’s well worth considering‌ ‌how‌ ‌you‌ ‌want‌ ‌to‌ ‌leave‌ ‌things.

• Do you see yourself selling your interest in the company?
• Do you think you’ll simply pass ownership to your son or daughter?

To determine the most cost-effective way to hand over your company to its new owners or managers, you should seek input from a number of professionals, including accountants and business lawyers. ‌Generally speaking, you should start working on your succession plan at least five years before you intend to exit.

2. Who Would Make a Good Successor? A Good Leader!

Soft skills are just as important as (if not more than) technical knowledge of your industry. Having documented processes in place can make the transition much easier, letting you concentrate on finding a candidate with emotional intelligence and leadership skills. It could be a longtime manager or a family member who has always showed an interest in the business. Whoever it is, make sure it is someone who can carry on the vision that you started.

3. How Should You Onboard Your Successor?

You have found the ideal candidate for taking‌ ‌your‌ ‌business‌ ‌forward. What is the most efficient way to bring them aboard?

The answer depends on whether they were previously involved with the company. For example, a former manager probably knows enough about operations but may require more training on financials, goal creation, etc. If it’s someone who had a leadership role in a different company, all they may need is to be brought up to speed on daily processes.

4. Be Prepared To Adjust Your Plan As Needed

Business is one arena where you can expect the unexpected. The succession plan you put together now may not make sense in five years, or your chosen successor may decide that leadership is not for them. While your goals for the company may remain the same, the way you achieve them may change. Be prepared to be flexible right up to the moment you announce your departure.

Conclusion

Regardless of how you plan to part ways with the company, you want to make sure that the transition is legal as well as a sound business strategy. At the Florida Small Business Center, we can assist you with the legal documentation that accompanies the sale or succession, so if you have questions or would like to make an appointment to discuss your goals, call 1-866-842-5202.