You may not like to think about it, but it’s inevitable that one day you will leave your business.
Whether you decide to sell up or retire, it’s important that you plan for when that day comes.
What is a Succession Plan?
A succession plan is a strategy which determines the best way for you to exit your business while ensuring the business continues. The plan determines who will take leadership and/or ownership of the business when you leave.
Succession Planning is Essential
A good succession plan means a smooth transition with less likelihood of disruption to your business. By planning your exit well in advance you can not only maximise the value of your business, but also enable it to meet future needs.
The two main options when retiring or exiting your business are “retention planning” – passing it onto your family. Or “Buy-sell planning” – selling to a third party that will continue the business.
Failing to invest the time in a succession plan can lead to your lawyer and accountant picking up the pieces of a broken business when it is too late, in an effort to realise something of value for you or your surviving family. And that is the last thing anyone wants.