Topic: Business Law
Starting a new business is exciting and most of us hope that our business will thrive even if we are not at the helm. Too often however, we neglect an important part of forming a business – succession planning. We often do not want to think about succession planning simply because we want to believe we can stay in control of our business.
Family-Owned Business Challenges
Let’s assume you have a small family-owned business. What happens if you are unexpectedly hurt in an accident and are unable to communicate with your family members? Do you have a plan in place for who is going to take over? Failing a succession plan, your family members may get so tied up in battling over who should be in charge, your business could be in jeopardy by the time you recover from your injuries. Should you unexpectedly lose your life, the outcome could be even worse; your family may never agree on who should be in charge and ultimately your business will fail.
Failing to Plan is Planning to Fail
Even if you have a mid-sized company, if you have no succession plan in place your business will be in jeopardy if you become disabled or lose your life. Only by having a written plan in place for someone to take over immediately will your business have a chance to continue to thrive. There are numerous options available for succession planning including:
• Buy – sell agreements - if your business has one or more partners, this may be the ideal vehicle for transferring your share of the business to the other owners. The sale value of your share of the business could then transfer to your loved ones.
• Choose-train successor - another option is to make your successor a part of the organization long before it becomes necessary. Train them on the day-to-day responsibilities you are currently handling and ensure everyone in the company understands this is the person who will take over in the event if your disability, retirement or death.
We understand the challenges associated with thinking about retirement or planning for disability or death. You need to work with a skilled business attorney to ensure your business will continue to thrive even if you are unable to manage the operations. For assistance developing a succession plan for your business, contact The Posey Law Firm, PC today. It’s never too soon to plan for your future or the future of your business.