Studies have shown that most business owners in New York and throughout the U.S. don’t have succession plans in place. While some owners believe that it’s too early to think about a succession plan, others feel that it’s too much of a hassle. But it’s important to remember that a succession plan isn’t just for retirement. An unexpected life event can leave a business owner dead or incapacitated. And if there is no succession plan, the owner has no control over who will take over their business.
A succession plan is one of the most vital parts of the business formation and planning process. To start, an owner should gather their financial documents and see how much their company will be valued. This also makes it easier for them to entice potential buyers.
An owner should also start identifying people that they trust to take over their business. These might be friends, relatives or co-workers. They should also consider that they’ll have to take time to train the new owner to run the business. For this reason, it’s even more important that they start working on a succession plan as soon as possible, even if retirement is still decades away.
An attorney might offer legal advice and guide a business owner through the process of writing a succession plan. They might be able to help their client gather financial documents, pursue potential buyers and figure out who should take over their business. Legal counsel could also assist with other business-related issues like writing contracts, buying real estate, establishing business partnerships, making employee agreements and more.