Successful Succession Planning

You've watched your business mature over a number of years. It's grown with experience, increased its profits, and expanded its staff. But whether your business is so fresh you can still smell the paint from the office's outdoor marquee, or so seasoned your boardroom chair has conformed to your body shape, it's never too early to think about succession planning.

The process can take up to five years to complete, and things can get more complicated if it's a family business. And a botched succession transition can bankrupt a company without the necessary planning.

For example, how much money do you stand to lose with your workflow being disrupted during the transition? Whom should you select as a successor? Should it be someone with seniority in the company who decades of industry experience, or a younger, more entrepreneurial visionary who can guide the company through a changing market? Should it be a family member or someone outside the family with a different perspective? What specific skills are required of your chief staff?

This issue, among a number of others, can not only be solved in advance, but processes can be set in place to deal with issues should something unexpected happen in the company (the sudden leave of an senior member, for example). This gives your successor an advantage when taking over the company, so lessons you already learned the hard way don't have to be repeated.

Having an accounting firm assist you in developing a succession plan has a number of benefits, especially when navigating how your taxes will be affected through a transition.

  • We can assist you with valuation.
  • We will offer guidance for applying for a loan to help cover any costs while the succession happens.
  • We will point out any internal financial changes that come from moving from a sole proprietorship to a partnership or corporation.

Most business owners spend some time fantasizing about retirement. But it's the really smart ones that start planning for it. Contact us. We can make the fantasy come true.

Tyler Vreeling