{"id":6805,"date":"2020-12-09T13:55:12","date_gmt":"2020-12-09T13:55:12","guid":{"rendered":"https:\/\/www.porterwm.com\/?p=6805"},"modified":"2020-12-09T13:55:41","modified_gmt":"2020-12-09T13:55:41","slug":"creating-a-successful-business-succession-plan","status":"publish","type":"post","link":"https:\/\/www.porterwm.com\/2020\/12\/09\/creating-a-successful-business-succession-plan\/","title":{"rendered":"Creating a Successful Business Succession Plan"},"content":{"rendered":"\n

An exit strategy helps business owners ensure the long-term success of their company<\/em><\/p>\n\n\n\n

A good succession plan creates a blueprint for ownership transfer as you exit your business. It helps you prepare for your retirement, ensuring you have the income you need. And setting a well-conceived plan into motion protects the people around you, including your heirs, employees, and customers by laying the groundwork for a smooth transition.<\/p>\n\n\n\n

Yet, despite these important benefits, many privately owned businesses don\u2019t have a succession plan, leaving the business vulnerable to unforeseen circumstances. For instance, if the business owner dies or becomes incapacitated, there may be no one to step in and lead the company as it regains its footing. Planning early can head off these issues and produce other benefits, including having the time to retain key employees and mitigating tax burdens triggered by a sale.<\/p>\n\n\n\n

Making a plan<\/strong><\/p>\n\n\n\n

As a first step to creating a succession plan, assemble a team of experts. Work with a lawyer, accountant and financial advisers who can help you make any necessary changes to your business\u2019s legal structure and ensure the proper paperwork is in place.<\/p>\n\n\n\n

Get an appraisal from a third party to determine the value of your business. An appraisal can help you set sale prices or set prices for ownership shares. If your valuation comes back lower than you expected, work to increase the value of your business before it\u2019s time to sell.<\/p>\n\n\n\n

Next, think about what kind of relationship you want with the business after you exit. Do you want to maintain an interest in the company? Do you want to stay on the payroll as a consultant? Would you rather cut all ties and never think about it again? Knowing where you want to land will guide your exit plan.<\/p>\n\n\n\n

Create manuals for management and employees that allow your successor to jump in and get acclimated relatively quickly. Be sure there are employees who can take over your responsibilities and that there are no tasks only you know how to do.<\/p>\n\n\n\n

Choosing a successor<\/strong><\/p>\n\n\n\n

Once you know the role you want to play, it\u2019s time to choose a successor. Broadly, your options are:<\/p>\n\n\n\n