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3 tips for business succession planning

On Behalf of | May 10, 2024 | Estate Planning

If you’re doing estate planning as a business owner, a major part of that plan may be business succession planning. You need to pass the company on to someone else. If you want it to stay in the family, this person may be a direct descendent, like one of your children or even grandchildren. But you can pass a business on to anyone you want, such as an employee or a manager who you have been grooming for that role.

Either way, it’s important to get this right to give your business and all of the employees the best chance of success moving forward. Here are a few things to keep in mind.

1. Start early

It’s often best to start succession planning as soon as possible. Take your time to identify your goals and how different beneficiaries or employees fit into your plan. If you are going to train someone to take over after you leave the company, start doing this well in advance so that they can have years of training while you are still at the business.

2. Update and adapt

Once you draft a business succession plan, don’t be afraid to update it as necessary. New concerns or information may come to light. You may be talking with your beneficiaries and find out that someone isn’t interested in being involved in the business, for example.

3. Consider everyone who will be impacted

Depending on the size of your business, the transfer of ownership could have a major impact on dozens or even hundreds of people. You have other executives, managers, supervisors and lower-level employees. A comprehensive business plan should consider all of them and how they will be involved in the transfer or how it will impact their position within the company.

A comprehensive plan will help this process go smoothly. Make sure you know what legal steps to take.

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