What is Succession Planning?

Succession planning is a way to make sure your business is prepared for the future.

Whether it’s someday transferring the business within the family, or selling to a partner, an employee, or an outside buyer, it’s important to have a plan for how you will exit your business.

Since a part of your financial future is likely to be riding on this transition, it will be important to have a business valuation conducted by a skilled professional. This assessment of your business assets, income and market value can give you an idea of your company’s overall worth and possibly even be a guide of what you can do to boost that assessment over time.

Even if a transfer or sale is years in the future, a succession plan can help you lay the groundwork for change. A good plan can give you time to continue building your business by retaining or bringing in key employees and identifying and training your successor.

There will be many other things to consider, like having the right legal structure and insurance coverages, so working with advisors such as your attorney and accountant will be important.

Once you have created a solid succession plan, it will be essential to review it regularly and to update it as necessary based on changes over time.

What you do now to prepare for succession will make a big difference down the road.

Talk to a banker today to learn more about what you can do to build a solid succession plan.