Business owners have countless obligations and responsibilities to which they must attend. Everything from hiring and firing to product development and marketing may go through an owner, not to mention the short- and long-term plans for the business.
Considering the massive role that a business owner plays in the day-to-day operations and future of a company, it can be devastating when he or she passes away. This is where a business succession plan would prove to be invaluable, as it would provide critical guidance and direction for what should happen to the business.
What is a business succession plan?
If you own a business and pass away, decisions must be made regarding what should happen to the business and who will take over your role. This is no small undertaking, especially if death was unexpected.
A business succession plan can dictate whether the business passes to an heir or should be sold to an outside party. It also identifies the party you have chosen to take over the business. This allows you to retain control over the fate of your business, even if you pass away.
Should I have a plan?
If you own a business, having a succession plan can be essential. Without one, your business can go through probate, just like your other assets and property. Without any planning by you, the future of the business will be in flux. Your family members may dispute what happens to it; it could take years to resolve succession issues; new owners may cause irreparable damage to a business and/or its relationships.
A business succession plan can prevent this.
As this Forbes article discusses, numerous tips can help a business owner create a plan that fits his or her needs. You would be wise to consider elements like addressing digital assets in your plan and deciding who might be best suited to take over for you. This could be an heir, a partner, or an outside partner.
Having a business succession plan in place can give you, your family, and those in your business peace of mind for the future. As such, it can be worth discussing the options available with an attorney.