When you run your own business, you need a succession plan to help your business thrive even in your absence. Small business owners often invest everything into their companies, but they do not always plan for the future. Take the time to prepare.
What Is a Business Succession Plan?
A business succession plan explains what will happen if you or another key person cannot run your business any longer. You might have a medical or family emergency, you might pass away suddenly, or you might decide to step down from leadership. If any of these things happened, the business succession plan would take effect.
All too often, small business owners do not tell anyone their wishes as to who should take over the business and how it should be run. If the worst happens, everyone from family members to company employees is left adrift. The business succession plan helps avoid this scenario.
The plan should specify who takes over which aspects of your job, and it may discuss who will become the legal owner of the business. If you want to have the business wound up instead of continuing to operate, the plan should describe a timeline for winding up and distribution of funds and inventory. If you have employees or crucial deadlines, the plan should describe how to make sure employees get paid and meeting the deadlines in your absence.
How Do You Make a Business Succession Plan?
Making a succession plan can be as simple as writing down a set of instructions, or as complex as signing a written contract with your business partners. If you wish the document to be legally binding in court, you should have a lawyer prepare it.
In any case, the plan should be in writing. You should keep the plan in a place that is accessible to your employees or business partners in an emergency. Tell them where it is, and let them know that it explains how to keep the business running if you are not around.
To find out more about business succession planning, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.