No matter which way you plan, it’s integral to have your succession lined up. It’s never an easy conversation to have, but it’s integral that your business be ready should there be any perils that can affect operation.
Specific questions to ask yourself: – What would happen if you will not want any #more to run your Business or even not be able suddently to do it? Is your company part of your will? Do you have shareholders and / or a board of directors who can appoint an individual to serve as the president or CEO, or do you have a designate who will take over in your stead? – Do you have a plan to retain key employees? Will your staff remain loyal to the company in your absence, or have they been more tied to you than the business? – Do you know what your business is worth? If the M.O. is for the business to be sold in case of your inability to run the company, will it be put up for sale? If so, what will be the value of your company and of all assets going forward? – Do you know how to increase its value? Do you have a business strategy in place that shows growth potential and expansion? How close is this to coming online and being a part of the company’s market offering? – Do you have a Buy/Sell agreement if you have partners? Will your share of the company be divided equally among your co-owners or has more emphasis been placed on one or two particular individuals? Will your family automatically inherit your shares? – Do you know where the money would come from to finance that acquisition? Will there be an exchange to “buy out” your share from family (or conversely for your family to buy out partners?)
As discussed above, you should have a business plan to ensure there are systems and processes that run the business without you; but even with the best systems, there will still be some decisions and work that only the business owner can make. Therefore, it is essential you have back-up plans and contingencies to ensure the on-going survival of the business even if something catastrophic happens to you.
Because there are unforeseen circumstances that can lead to you being off your company’s staff, it is important to have succession planning in place, should something happen. You (and your partners where applicable) need to have a clear action plan and a shareholder’s agreement that would address these issues.
This is especially for a business owner, since you have people counting on you (your clients, your employees, your family).