One of the most important but most overlooked parts of running a small business or large corporation is the art of creating a successful succession plan. Many businesses create a business based on a great idea, establish repeat customers and earn and invest money at ease only to fall apart when the business owner dies or retires. This happens because the individuals running the business don’t take the proper time to create a business succession plan that works.
The best time to create a succession plan for a small business is the present time. Whether the business is just starting out or has been in operation for decades, a succession plan establishes some critical elements and goals that allows the business owner to follow:
- Determine who will own the business next
- Determine when the transfer of power will occur
- Determine what training is necessary for the next owner
- Determine if the business will be sold
- Set a target asking price for the businesses
- Update any owner wills or trusts
- Update any business insurance policies
- Create a sales agreement for selling the businesses
Monitoring the succession plan
It’s not enough to simply put a business succession plan in place. It is important that the plan is inspected and analyzed every year or every few years as part of a full review of the business structure and model. The business succession plan often acts as the ultimate set of goals for a business. It is important that it is updated as a business changes and as circumstances change.
When a business takes a look at updating its succession plan, it is important to take a realistic look at where the company is and where the company is headed. Many companies set succession plans that are unrealistic and based on goals that are unattainable. Setting realistic, attainable goals as part of a succession plan is a critical part of building a successful business.
Hiring the right attorney
A reputable New Jersey business attorney works on behalf of the small business owner or large corporation to determine the right course of action for a proper succession plan. Such an attorney will sit down with the owner of a business to discuss the goals and aspirations of the entity. This will help establish proper goals within the business. An experienced New Jersey business lawyer will further draft the appropriate documents to prepare for a successful succession.