As a small business owner, you worry about dozens — or even hundreds — of things while running your company. Our guess is that business succession planning is not one of them.
That being said, having a comprehensive succession plan is crucial for any small business, as you want to make sure your business is still able to thrive even if you have to give it up. Or, you want to make sure you cash in on your business’s value if you decide to step down.
Moreover, a business succession plan is not solely used in the event of your death. Many things could come up — positive or negative — that may make it so you can no longer run your company. So, having a plan in place is important.
Three Business Succession Plans
The following are three of the most common business succession plans for small businesses. Please note that as you create your plan, you will of course need to be much more thorough and account for every variable at play. This article, however, gives you a good place to start.
- Sell Your Company to a Key Stakeholder: One option for a business succession plan can revolve around selling your company to a key stakeholder, such as an employee, investor, customer, or more. This method allows you to sell to someone you already know and trust, so there is a better chance of maintaining a sense of continuity at the company once you are gone. This would also make it more likely that employees will be willing to stay, as layoffs of trusted employees would be less likely.
- Transfer Your Company to a Family Member: Similar to selling to a key stakeholder, this option would allow ownership of the company to stay with a person or people you trust. If you have grown personally attached to your business and want to ensure your values are still present at the company once you leave, transferring it to a family member may be your best option.
- Sell Your Company to an Outsider: While selling to people you trust or giving your company to family may be the more ideal options, sometimes a good enough deal is simply too good to pass up. If you believe your company could be worth a lot of money and you want to cash in on that value, selling to an outside owner may be your best bet. If you choose this option, though, you may not have any say in what happens to the business you built once you are gone.
Get Professional Help with Your Business Succession Planning:
Business succession planning can be difficult, as you must know all variables to consider in the process. Plus, the decision you make will have a huge impact on your future and the future of others at your company. So, seeking professional help with your planning may be the right option for you.
If you need experienced and trustworthy business succession planning consultants, please do not hesitate to reach out. We would be more than happy to speak with you about how we can help. Krowne Certified Public Accountants offers unparalleled financial guidance and professional services specifically tailored to our client’s needs.
Please feel free to reach out to us by filling out the form on our contact us page or via phone at 818-831-6075. We would love to discuss your situation and help you grow. We look forward to hearing from you.
