Business Succession & Exit Planning
What is Business Succession Planning?
Business Succession Planning (a.k.a. Exit planning) refers to the actions taken to transfer business ownership and/or control so that a business is able to continue operations successfully after an owner’s departure or death. It covers all elements of a business’ operations including products and services, customers, vendors, employees, contracts and distributions.
To ensure the viability of your business you need comprehensive plans in place for sales activities and day-to-day operations once the owner has exited a business whether intentionally or not.
Importance of Succession Planning
It is important to be prepared for the unexpected and to have a plan in place that your employees and other stakeholders can follow in case something happens to you.
A well-defined succession plan will help ensure that your business continues to run smoothly even when you are no longer around. The right succession plan can also help protect your assets, keep customers from being lost, and help keep employees happy by reducing uncertainty about their future with the company.
3 Reasons to Create Your Succession Plan Now
1. Company Protection
Protect the company in the event of your death or disability. If something happens to you, then your family will have a plan in place for taking over ownership of the business. This also protects the employs of the company who rely on you to drive the business forward currently.
2. Smooth Owner Transition
Transfer control and managerial responsibility when necessary. When someone takes over from you as an owner, they will have all the information they need to take over and run things smoothly without missing any steps along the way. By doing this, you help steady the ship and keep everyone calm even when you’re no longer there.
3. Preserve Company Culture
By creating a succession plan now, you are able to include core competencies and processes unique to you and your company. You’ve worked hard to build a company culture and through succession planning you can help ensure that culture will continue in some fashion once you are gone.
How TREP Advisors Guides You Through Your Succession Planning
The TREP Adivsors team will help guide you through the entire process of creating a unique business succession plan based on your needs. The process starts with discovering your goals as the business owner if you had to exit the company in a variety of situations.
Next we look at a snapshot of your current business in a variety of areas: financials, customer and business mix, managerial structure, etc. Once all the information has been gathered, our team will work with you to craft a business succession plan tailor-made to your desires and the realistic state of your business.
Ready to Craft Your Unique Succession Plan?
Don’t wait for an event to force you into having to make a rushed, ill-prepared decision regarding the fate of your business. Even if you don’t believe now is the right time to make a move, it’s very important to take the necessary steps now to make sure there is a plan in place if something were to happen.
Frequently Asked Questions
What is succession planning and why is it important?
Succession planning is the process of determining how a company will move forward when ownership leaves the business whether due to unplanned or planned circumstances. Companies should be prepared to continue operations effectively in the event an owner exits the business.
When is the best time to create a succession plan?
Even if a business owner is not ready to exit their business through a transaction, it is important to have a plan in place in case something unexpected like illness or death occurs. This ensures some stability for both the company and the owner’s family.
What is the first step in business succession planning?
The first step in creating a successful succession plan is to determine what your goals as the owner exiting the business are; both personally and with the company. How would you want your company to move forward if you had to face an unexpected medical emergency?
What are the best practices for succession planning?
The best practices for creating a succession plan are knowing your company’s financials and having an effective managerial structure in place with employees who can carry the company forward in the case of an owner’s exit.