It’s been said that the best time to plant a tree was 20 years ago; the second best time is now.
And if you own your own professional business, retirement isn’t simply a matter of not going into the office anymore. You’ve got some critical and strategic succession planning to do – and the sooner you start, the better the chances your business will continue to thrive.
Because whether you intend to sell your company or pass it on to a family member, a succession plan helps to ensure the long-term viability and sustainability of your business.
According to the Conway Center for Family Business, family businesses account for nearly 65 percent of the gross domestic product, more than 60 percent of jobs and nearly 80 percent of new job creation in the United States. But according to a recent PWC survey, only 52 percent of them are confident that members of the next generation can assume a new leadership role within their company successfully.
But when you consider that more than seven out of ten family-owned businesses fail to survive the transition from founder to second generation, a well designed, developed and implemented succession plan should be a priority in order to ensure the survival of a family business from one generation to the next.
And successful succession planning hinges on taking the following steps:
- Don’t wait to start. It can take as long as a year to put together a succession plan – and many more to refine and revise – as it can involve emotionally delicate issues, such as selecting a relative or longtime employee to take over.
- Make your succession plan part of your business plan. You likely already have a business plan for the next few years – and your succession strategy should be an integral part of your overall business plan. And the sooner you start, the more time you have to get it right.
- Involve your family. Whatever your vision for the future, your family needs to be a part of the conversation, especially if your spouse, partner, sibling, or child aspires to assume a leadership role.
- Have a team of advisers. While you’re the expert on your business, enlist the help of experienced advisers – lawyers, accountants, business partners, succession planners – to guide you through your vision for your company’s future.
- Identify and train your successor. You’ll want to choose an ideal successor to take over after you leave – and then train them yourself with the necessary and required skills for the position as only you could.
Once you have a better understanding of how you envision the future of your business, we can begin creating your succession plan. Just as every professional business is unique, every succession plan will be tailored to the needs of your company.
A thoughtful business succession strategy can save you and your family a significant amount of hassle and potential discord because the day you’ll need a successor will come – and perhaps sooner than you anticipate.
You’ve worked hard to build your professional legacy. Contact the experienced accounting professionals at Bedinghaus to help you prepare the right succession plan for your business so that it can continue to thrive for generations to come.