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Business succession planning: The basics

On Behalf of | Sep 17, 2023 | Business Planning

When someone owns a small business, they tend to serve as the heartbeat of their operations. They likely invest so much of their time and effort into the enterprise that it can be truly difficult for others to think of that endeavor carrying on without them. Yet, as everyone’s professional career must end at some point, it’s important to plan ahead for a day when that business owner will no longer stand at the helm of their company’s operations.

Business succession planning serves as the roadmap for what will occur when the owner and/or senior manager of a particular company steps down, steps aside or is otherwise no longer in a position to carry on in their capacity as head of their enterprise. A well-crafted business succession plan can help safeguard both the interests of the business and the interests of everyone involved in its success.

Starting to craft a plan of action

There are usually a few phases involved in the business succession process. The first is identifying who will take over in the absence of current leadership. The second is training the individual(s) and setting expectations so that the transfer of authority will be as seamless as possible. The third is the actual handing over of the reins.

It’s important to both think critically about the unique needs of a particular business and to seek legal guidance when crafting a succession plan. Approaches outlined on templates one can scrounge up online are just not detailed enough to meet the needs of any but the smallest enterprises. Remembering that every company benefits from specific approaches to leadership can help to drive the drafting of a thoughtful and personalized business succession plan. Sound legal guidance is essential.