Whether you have been in business for decades or you are just starting out, it is never too early or too late to create a business succession plan. The day-to-day operation of a small business takes a lot of time and energy. However, making a plan for what will happen if an unforeseen event occurs or you retire can safeguard the stability of your company and facilitate its continued success. A business succession planning lawyer can help you create a plan that can keep your company stable during trying times.
Help Your Business Survive When Unexpected Circumstances Rise
The COVID-19 pandemic showed that creating effective business succession planning strategies is more important than ever. Unfortunately, things happen that can leave your company without a leader. A sudden death, accident, illness, unexpected resignation, and other issues can lead to turmoil and quickly have a negative impact on your small business. When you have a succession plan in place, less time and money will be spent on scrambling to find external candidates for management positions.
Identify Who May Be Right For the Job
Many small businesses are family-owned, but it does not mean that a daughter, son, or other family member is automatically willing or capable to take over. There may be other employees who are already critical to your company’s success and better suited for leadership. Creating a succession plan allows you to identify employees who have the skills and desire to keep your business running.
If there are certain people you have in mind, talk to them about their professional goals and future plans. Showing that you are committed to promoting staff development for the long haul can improve motivation and employee satisfaction.
Uncover Ways Your Business Can Improve
Business liability lawyers help entrepreneurs mitigate risk by identifying potential problems and areas in which a business can improve. The business succession planning process can help you recognize flaws in your operations and enable you to make changes that can support your financial security and growth.
Address Debt and Provide Tax Benefits
Many small business owners have lines of credit or loans that help keep their companies afloat. If they become incapacitated or pass away, a lender may call in the debt and demand repayment right away. A business succession plan addresses these issues and offers solutions for managing debt repayment.
For example, there may be certain funds or assets that can be used to take care of debt and lines of credit. Outlining this in your business succession plan can make things much easier for your successors and preserve your legacy. A well-crafted business succession plan can also identify strategies to minimize the tax implications of the transfer of ownership or control of a company.