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Succession planning—the time is now

Succession planning—the time is now

Posted on:  ,  | Author: ATB Business & Agriculture

Business is booming and things have never been better. You’re turning a profit, maintaining a healthy balance sheet, and you’re growing at a steady pace. Additional hiring is in the cards and you’re planning to scale your business. The future is bright, so why would you want to consider life after your business?

The truth is that there is no time like the present to begin planning the future of your company when you’re no longer in it. The best time to begin planning is now—regardless of when you plan to retire. It will force you to start thinking about tomorrow, so that when tomorrow finally arrives there are no unwelcome surprises.

What is a succession plan?

A succession plan is a component of your overall plan and strategy for your business that prepares both you and your staff for the transfer, sale or closure of your company—whether planned or sudden. A well thought out succession plan will help ensure a smooth transfer of your business, and will help you protect the legacy of your company, provide financial security for your family and stakeholders, and help prepare for unexpected events such as illness, accidents or death.

When should I start planning for my succession?

Delaying succession planning reduces your options, which could be detrimental to your family, the future of your business, and your retirement. “All too often, business owners don’t contemplate succession until they approach retirement, when in reality, that’s too late,” explains Andrew Patricio, founder and CEO of BizLaunch. “Succession planning takes a great deal of time and preparation, and getting the right people and processes in place to ensure a smooth transition can take several years.”

A driving factor behind many entrepreneurs’ decision to start planning for their succession is to safeguard their family’s future. However, there are other parties to consider as well. “Your succession will affect your employees, customers and suppliers,” explains Andrew. “If a business owner fails to adequately explain their plans for succession, it can lead to uneasiness for everyone involved and could be damaging to the company’s future.”

Similarly, a well-communicated succession plan will offer assurance to all parties, and will let them know that the company has a clearly defined course going forward.

How do I start planning for the future?

There are many steps involved in preparing and developing a succession plan, steps that can take from a matter of months to several years, depending on the size and requirements of the business. While it may take some time, the effort will be worth it. The result will be a clear, detailed plan that will allow you to smoothly exit from your business.

You’ve put many hours into your business and have likely made sacrifices to ensure the success of your venture. Starting to plan for the future of your company now will protect your years of hard work.

Succession Planning Checklist:

❑ Establish your goals and objectives

❑ Decide if you want to keep the business in the family

❑ Select and prepare a successor

❑ Seek expert advice

❑ Plan a management buy-out

❑ Determine the value of your business

❑ Sell the business

❑ Finance your succession plan

❑ Understand the tax implications and legal issues

❑ Manage your wealth to secure your future

Check out the ATB Guide to Succession Planning for more information and advice on safeguarding the future of your business.

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