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Elements of a Succession Plan
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Succession planning does not take place in isolation from the larger issue of your overall financial security. An effective succession plan will examine all aspects of your financial situation.
Distribution of Ownership
If you are transferring ownership of your business, a shareholder agreement is a key tool that should be considered.
Selecting and Grooming Your Successor
Identifying the right person to take over the reins when you leave is a process that requires careful thought and planning.
Business Maximization Strategies
There are many strategies you should consider to increase the value of your business prior to sale or transfer of ownership.
The Role of Key Employees
Key employees are vital to the success of ownership transition, and can offer real help in the planning process.
Business Valuation
While you may have a good idea of what your business is worth, you should still consult with a professional business valuator to confirm or determine this crucial figure.
Financing and the Mechanics of Sale
Financing the change of ownership should be a key part of your succession plan.
Taxation and Legal Considerations
It is important that you consult with your tax and legal advisors early in the process to make sure that that your plan achieves your objectives.
Retirement and Estate Considerations
Since your investment in your business is probably your most significant asset, there are a number of important retirement and estate planning issues that should be addressed.
Timetable
When you develop your plan, you should ensure that there is a clear timetable, so those involved know exactly what will be expected of them and when.
Monitoring Process
Be sure to update and adjust your plan as necessary if and when there are changes to your business and/or personal situation.
Contingency Considerations and Risk Management
If illness or death meant that you were suddenly unavailable to manage the business, who would take over your responsibilities?
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