How Do I Start Succession Planning for My Business?
by Debi Enders
Succession planning can maximize the company’s value for the owner(s) and provide security to key management and employment for the workers while preserving a community resource.
There are a number of factors to consider when thinking about succession planning. These include the availability of a successor as the business and family matures. Also, the financial position of the owner should be considered. The financial circumstances of the owner and business may dictate how the business is handled.
The key question to ask is, “If I’m no longer here, how will the business continue to operate?”
The starting point is to sit down with a succession-planning adviser – generally the business owner’s banker, along with his attorney and accountant. The adviser should outline the pros and cons of the many business and estate planning tools that can aid in transferring or selling the business.
Once the plan is complete, all of the players should know where they are going to end up when the succession plan is implemented. The end result is to have the right plan that will benefit your business, your family and your employees after you’re gone.
Debi Enders (debi.enders@commercebank.com) is assistant vice president, small business banking at Commerce Bank.