If you are a business owner, there will inevitably come a time when you'll have to consider what to do with your business when you are ready to move on. Some options include transferring ownership over to a key employee, selling to a third party, or dissolving the business entirely.
What business succession looks like ultimately depends on the type of business you own and what your goals are for the company. Here are three ways to make sure your business succession planning goes smoothly.
Start Planning Early
In general, it's best to start thinking about business succession before it becomes necessary due to a crisis or emergency. Starting to plan early means that there will be no surprises and that everyone will know what to expect before your departure becomes an issue. Ideally, it's good to put a plan in place long before you plan on retiring.
Make Sure Your Company Is Accurately Valued
It is vitally important for planning purposes that you know the realistic market value of your business. This will be helpful for you to make informed decisions about your succession options, each of which will have certain tax implications and other financial considerations. You may want to enlist the help of a professional business appraiser for this purpose. Your accountant and attorney can also help you analyze your options.
Seek Input from Others
Finally, it's important to solicit input from your employees, business partners and even family members. Ask each of these people about their goals for the future. You may be surprised how their goals and expectations could change your succession plan. Engaging these people in open and frank conversations is very important. Having your team and everyone close to you on-board with your plan will be crucial to a successful transition