Tips for an Effective Business Succession Plan
Business leaders create a business succession plan to pass leadership roles down to employees. These plans ensure that businesses continue to run smoothly and without interruption, after leaders retire, pass away, or leave for new opportunities.
Succession planning for small businesses is as important for larger entities. Small business planning often means training the next generation to take over the business.
A recent survey reveals that only 45% of small businesses have a succession plan in place. This should be a priority and now is a great time to make one. Here are some ideas:
- Sell to a key employee or a business partner
- Transfer or sell to a family member
- Sell to an outside buyer, or
- Liquidate the business and pay the taxes owed
If you intend to transfer the business to a family member, do not delay the succession plan until after your death.
Small business owners should know the value of the business and include that in the succession plan. Read this article for more information on business succession planning.