Building a successful business can be the crowning achievement of your professional life. You will need to plan for what happens if you retire or are no longer able to continue running the business.
Succession planning can be complex. Consider these key factors when embarking on this process.
Know your options
You have multiple options for what happens to your company. If you want your business to continue after you are no longer in charge, you can pass on ownership to someone else, or you can sell the company to a third party. In some circumstances, the best alternative may be to close your business.
Consider your needs
You will need to evaluate your financial needs to help make key decisions when planning for succession. For example, if your retirement funds are not sufficient to support you in retirement, you may want to consider selling or liquidating the business.
Determine succession candidates
If you decide to pass ownership of the company on to someone else, you will need to carefully consider candidates for the role. These candidates could include family members, friends, employees or other stakeholders. Once you have identified a person or people who could fill the role, you will likely want to invest in their professional development to ensure they are ready to take charge when the time comes.
Part of successful business succession planning includes preparing for both your ideal outcome as well as unexpected circumstances. Proper preparation will help to ensure an outcome you are happy with.