While a succession plan may not be the first item on your to-do list, it is extremely important to get done. A succession plan ensures that your business is taken care of in the case of the unexpected. Having a smooth transition of power in your business makes it easier to deal with the change. Continue reading for answers to frequently asked questions about succession planning for business owners.
Why is having a business succession plan important?
Your business needs to be protected in the case of an accident. If you are suddenly unable to run your business, you need to have some form of plan for next steps on who will take over and how. A succession plan also makes sure that your interest in the business is protected.
Why do I need to worry about planning if I am incapable of working?
A proper estate plan will have a plan set in place for small business owners for their business to be taken over in the case that the owner is no longer able to work. The person who will oversee the business will need full legal authority to operate and manage the business. If there is not an incapacity plan in place, it will be difficult for the succeeding person to gain legal authority to make any decisions.
Do I need a Buy-Sell agreement?
A Buy-Sell agreement provides a guarantee that you or your family will receive fair market value of your ownership in the business if you or your loved one’s plan to sell it later on. This ensures that your family does not have to sell the interest in the business for a large discount in the case of an unexpected event leaving you unable to work.
What does my succession plan need to address?
Every succession plan is different since each business is different but there are several items that need to be addressed in each succession plan. These items include who will immediately take over day to day operations, are your employees aware of who will be in charge, does the person taking over have legal control, and who will take over the business long term.
Having a successful succession plan is in the best interest of your business. While no one likes to think about what happens in the case of an accident, it is important to make sure your business will be properly taken care of. Mooney Lyons is here to help you develop a quality succession plan for your business. To learn more about succession planning, reach out to us at (847) 382-2600 or email info@mooneylyons.com
Sources:
https://trustcounsel.com/2014/08/10-essential-questions-to-guide-your-business-succession-plan/
https://venturiwealthmanagement.com/five-important-questions-answer-successful-business-succession/
https://hedekerlaw.com/business-succession-planning-frequently-asked-questions/