SBM July LogoDoes your small business have a succession plan in place? Karen Stern, Partner in Charge of the Entrepreneurial Services Group, discusses the necessary steps to ensure a successful transition in this month’s “Financial Fitness,” as featured in Small Business Monthly.

Succession planning isn’t always the most pressing topic of conversation for business owners, but organizations of all sizes need to have a plan in place. According to the U.S. Small Business Administration, more than 50 percent of all small-business owners are age 50 or older, making now the ideal time for many to think about the future of their businesses.

From planning transfer of ownership to addressing the financial impact, your adviser can ensure you have the knowledge necessary to transition successfully. Here are a few items to consider:

  • Timing. Work to have a proper plan in place early on, answering the appropriate questions regularly to make sure you’re up to date with current procedures and processes. Select your successor and work with your adviser to develop a plan before it’s an issue.
  • Prepare your successor. Ensure your successor is prepared in more than just name. Pass along operational tasks and business relationships to ensure your replacement can nurture key talent and maintain the business mission.
  • Build a legacy. Succession planning isn’t a death sentence. As owner, you can still maintain a presence without handing over the reins completely. However, there are potential long-term tax advantages of passing on a portion of ownership early.
  • Option to sell. If you are electing to sell your business rather than keep it running after you’ve left your position, be proactive. Perform a professional business valuation and ensure you give potential buyers enough time to vet your business.

With the right plan in place, your transition should be financially sound and will benefit you, your business and its employees in the long run.