A Succession Plan is vital to ensuring the continued success of your business. Succession Plans transfer ownership, maintain your lifestyle in retirement, provide financially for heirs or prepare the business to address unexpected events. The Succession Plan is longevity insurance for the business you’ve worked so hard to build.
There are four strategic steps to follow when developing a succession plan.
1. Decide How to Exit Your Business
• Transfer the business to your heirs.
• Sell your business to your business partner(s); to key employees; or to an outside buyer.
2. Conduct a Business Valuation
• Develop a retirement income strategy.
• Creates value for your future owners’ shares.
• Determine adequate insurance for protection planning.
3. Prepare for Transition
• It is a vulnerable time for any business so prepare both your successor and your business for a smooth hand-off.
4. Review Your Plan Regularly
• Creating a Succession Plan is a big accomplishment, but don’t just file it away. Financial experts suggest reviewing your plan annually.