is something rarely thinking succession planning by small business owners about it. In fact, a recent survey conducted by Insights West performed determined on behalf of Small Business BC, that less than a quarter of small business owners currently have a succession plan, while more than a third do not think it is important.
Why?
As a small business owner, it's hard to look too far into the future. There are so many day-to-reach objects and short-term goals for the day that the reins on the transfer to think too distant future may seem. Your business is also probably one of your great love (do not tell your spouse). You do not want to think about letting go of control and go on without you.
Why is succession planning necessary?
You're likely to give your life building your business. They make sacrifices and you all throw in the work there. But what happens when it is time for you to retire or if anything had happened? Do you want the company's commitment to your customers continue, your community, your suppliers?
Without a clear succession plan, many companies sold fail, after the owner retires, the business or dies. Without captain the ship or a map to guide to show the way, the business simply drifts until it encounters an obstacle and sinks.
Early preparation means that you take time to make the plan and the necessary steps to build an efficient transition from one owner or operator to ensure the next, regardless of whether you are the steps to complete.
If you want to start your succession plan?
It's never too early to create a succession plan. Even if your plans, step-down or sell the business to retire are dreaming far, far ahead of the plan makes sense. Who knows what the future holds.
There is actually a strong argument for a succession plan to be built in your start-up business plan. If you know that your goal is to work for the company until you retire, or if you want to build the company for ten years and then sell it, you can know the systems and processes for the business around these goals to build.
How much does estate planning cost?
The sooner you start your succession planning, the less painful the cost will be, because they are spread over several years.
There are both internal and external costs when creating the plan and these depend depending on your business structure.
- internal costs. This costs time and your team's time will usually be in addition to any administrative resources that you need.
- External costs. This often lawyers and accountants. You can also use a broker, if you are planning your business or recruitment consultants for sale, if you are looking for someone to come and take your role as leader.
your succession plan is a road map that leads to the transition of your business to your exit, for whatever reason. As your business plan, it should be a living, breathing document, reviewed every six months to ensure that the content is still valid.
For more information about how to create a succession plan and how to put a value on your business, check our succession planning for businesses and what is worth your business? Business Valuation Seminars presented by Paul Savage Pacific Custom Brokers.
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