Benefits of a Good Business Succession Plan
A comprehensive business succession plan is an often-overlooked part of running a small business in Naples, Florida. A succession plan is a critical document that helps ensure that the future needs of a business are met should the owner or key employee retire, resign, get fired, become ill, or pass away. However, overwhelmed with day-to-day tasks, owners frequently put off planning for the future.
It is important for business owners to understand the many benefits of creating a good business succession plan. Below are five of the most significant benefits of having a good business succession plan in Naples.
1. Creates a Smooth Transition.
The transition period during a change in ownership is a vulnerable time for businesses. Many unprepared businesses do not survive the changeover. Having a solid succession plan ensures the success and legacy of your business when you retire or are forced aside for any reason.
If you decide that your business should be sold, creating a succession plan gives you the time to ensure that your financials will tell a story that the buyer will understand. You can take precautions to ensure that your business will not be undervalued. Business owners often work to minimize profits and maximize deduction to limit tax exposure. However, this strategy can negatively affect the value of your company when it is being sold.
2. Prevents Conflict
A succession plan helps ensure that your business’s culture and environment are not negatively impacted during a change in leadership. It lays out a clear strategy that eliminates confusion regarding who will carry on the business after you are no longer able to yourself. Your intentions are made clear, and everyone is put on the same page. This is particularly important for family businesses, where miscommunication and confusion can easily lead to disputes and estrangement.
3. Help Business Survive Unforeseen Events
Without a succession plan, your business that you worked so hard to create may cease to exist if you unexpectedly die or are forced to retire due to a sudden health issue, family emergency, or arrest. This is especially true of small businesses that generally have fewer individuals involved and are prepared to step up. Those remaining will have to scramble to keep the business running smoothly and may even be forced to sell the business under duress. With a proper succession plan in place, your business will be prepared if a tragedy occurs. You can ensure that your business will continue operating long after you are gone.
4. Promotes Training and Development
In addition to helping your business in the future, a succession plan benefits your Naples business in the present. It focuses business owners on the long-term success of the company. When creating a business succession plan, you have the opportunity to understand and elevate each potential candidate’s strengths, weaknesses, and leadership styles, allowing you to identify employees who can be promoted to leadership positions when the opportunity arises.
Instead of being forced to respond quickly in a crisis, your business will have the time to train and develop chosen employees. There will be qualified candidates prepared to succeed in their new roles.
5. Improves Employee Engagement
Employees will be more committed if they know they have a future in the business and there is the potential for career development. Increased employee engagement translates into reduced costs for your business. Employees are likely to be more productive and less likely to leave their position. Retaining employees has significant benefits. Hiring and training new employees and leadership comes with considerable costs.
Do I Need a Naples Business Planning Attorney?
A Naples business planning attorney will have the tools and expertise to develop a business succession plan that helps you achieve your goals. Succession planning involves complicated tax, estate, and other legal issues. However, the process does not need to be overwhelming if you work with an experienced business planning attorney. With a professional on your side, you will have peace of mind that the proper documentation is in place and nothing is falling through the cracks. You will know that your business is prepared for whatever the future may hold.
Call A Naples Business Planning Lawyer
If you have questions about creating a business succession plan, you should contact an experienced Naples business planning attorney. Contact our offices today at (239) 449-6150 or use our web form to set up a free consultation.