When you own a successful business and your future looks bright, it can be tough to imagine what would happen if you were not there. Things can change in the blink of an eye due to an accident or illness, and the COVID-19 pandemic has shown that it is more important than ever to be prepared. However, business succession planning is not just something that is needed when an unexpected event occurs – it can also help to ensure the success of your company after you retire. Talking with an experienced business succession planning lawyer can help you understand how a good plan can help your business thrive for decades to come.
What is The Purpose of Business Succession Planning?
The aim of succession planning is to ensure your company has adequate procedures and qualified leaders in place if unexpected events occur or someone retires. Failing to plan can leave your business in chaos. If no one around knows how to run the company, it can go downhill quickly.
Benefits of Business Succession Planning
Having a solid business succession plan in place has many benefits – it can make transitions easier for everyone involved and keep your company rolling along. Estate law attorneys often advise clients to make business succession planning part of the estate planning process to protect their family’s financial future. Each business is different. For example, real property lawyers may better understand the unique needs of clients in the real estate and construction industries.
It Prepares Your Business for Disaster
Regardless of how old you are or how long your business has been around, there are many scenarios that can make your company vulnerable. Companies buy insurance policies to protect their businesses from unexpected events like fires and natural disasters. Consider a business succession plan a kind of insurance for an event such as an owner suddenly retiring, becoming ill, or dying. Thinking about business succession planning can be daunting, but having a good business attorney in your corner can help you shore up your company for the long haul.
Creates Structure and Opportunity
Business succession planning can help you identify which positions are most critical to keeping your business running smoothly. It gives you an opportunity to observe possible candidates and see whose skills and values match up with your company’s mission and plans for the future. Talking with management and employees about their career plans and interests can help you better understand potential vulnerabilities, and see if cross-training employees in certain roles is necessary.
Even if some employees do not have a lot of experience, if they are ambitious and willing to learn, acknowledging their hard work and showing appreciation can inspire them to stay with you for the long haul and grow into management positions throughout the years, and eventually, take over when you are gone.
If you own a family business, you may also realize that just because your adult child works for you, it may not mean that they are capable of or willing to take over the company someday. Starting conversations about these issues can be challenging, but framing it in the context of planning for your business’s future success can make these discussions less emotional.
Expedites Training and Development
Once you have identified candidates for senior positions, you can begin to help them in their professional development and training. This gives them time to acquire the skills and they may need to be successful down the road. Investing in your employees’ growth is also an investment in the continued development of your company. It is never a bad idea to have fresh eyes that may be able to point out weaknesses or inefficiencies in processes and procedures or notice untapped sales opportunities and other vehicles for positive change. The world is always changing, and fresh ideas help your company evolve with it and stay at the forefront of your industry.
Our business contract attorneys help you understand the importance of business succession planning and work with you to create a plan that keeps your company on track to continued success.