Your business plan and your legacy should read like a good book.
It begins with an introduction to your team, organization and management structure (the main characters), describes your company and the services to be provided (the setting), and provides some background to your financial goals and projections (the plot). Next comes the heart of the book. It is your day-to-day operations and efforts that tell your story of success through your business’s chapters. It captures moments of hardships, tales of success in the face of adversity, and sets up a logical progression for the storyline.
Unlike a good book, however, the ending of your business plan should not be surprising or confusing to the reader. It should not be an overwhelming plot twist that stacks the odds against the management team or a cliffhanger that leaves everyone in suspense. Instead, your business plan should include a succession plan that is clear, well-defined, and reliable. It should resolve your storyline, leaving the reader satisfied with what happened or will happen to the characters (your employees). It should fill in any plot holes and wrap up the little details. It should leave your reader in a position where they can close the book, satisfied with where you left the protagonist (you), or leave the story in a strong position where your successor can continue to write the next chapter or perhaps start writing the sequel to your story.
A Business Succession Plan
Every business owner should begin putting together a business succession plan as soon as possible, either to ensure that operations continue, if at all, without any interruption to your clients/customers or to help reduce headaches and monetary loss for your family during the liquidation process. Plan for the unexpected. Plan for your transition, whether expected or not. The longer you wait, the more urgent this process becomes as you approach retirement and the more stressful the process can be.
Don’t have a succession plan? You’re not alone. Many small and medium-sized business owners lack succession plans, often because the owner is focused on what they need to accomplish that day and not necessarily thinking about what the business looks like when they’re unexpectedly gone or retired. Another common reason for not creating a succession plan is that the business owner doesn’t know where to start. That is where we come in.
Work with an Attorney to Build Your Business’s Succession Plan
Business succession planning is a reflection of serious logistical and financial decisions about who will take over your business upon your retirement, death, or disability. To get started, we typically ask clients to break those considerations down into three stages: assessment, evaluation, and development.
The assessment stage involves understanding the company’s strategic direction – where is the business headed? Who can continue to lead the company in that direction if you become disabled or unexpectedly pass away? Most commonly, clients will look to their current business partners, heirs or family members, key employees, or third parties, to lead the company into the next phase.
The evaluation stage looks at those potential candidates mentioned herein and identifies their key skills and experience to identify which candidates best suit your company’s strategic direction. Can those individuals carry the torch on your behalf?
Leading to the last and final stage in the analysis: the development stage. Can you develop those candidates mentioned? What activities are necessary to get any prospective candidate up to speed?
After weighing all of these factors, it is possible that a single option will stand out. In other situations, there may be multiple choices such as liquidating the company’s assets or selling to a current employee. Once you’ve identified your options, our team begins working with you to develop and draft a succession plan centered around your goals.
Coupled with a strong estate plan, your business, and more importantly, your family, can be prepared for the unexpected. Rudman Winchell has a large and comprehensive practice that can assist you in both your estate planning and business succession planning, ensuring that every part of your story is set up well for its next chapter.
Michael A. Hockenbury, Esq.