Whether they like it or not, every business owner must eventually face the issue of succession – what will happen to the business when it is time to go? This process is generally much smoother and more successful for all involved if the exit strategy is planned for in advance. A succession plan is the owner(s)’ game plan to deal with the sale, transfer, or wind-up of the business. It deals with both anticipated timing and the details. Questions to consider: Will the owner remain involved in some capacity? Will family members be involved and how will this be managed? Are there candidates for future ownership in the business or will the process require external input? If the owner becomes incapacitated, who will make the decisions? What are the legal/tax considerations? What is the value of the business and what are the options to maximize this value upon sale? A succession plan is a dynamic process, not a one-time event. As the business grows and evolves, the plan will require updating and possibly a re-focus to address an evolving business environment.
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