Top Reasons for a Business Succession Plan
If you are a small business owner in Naples, it is critical to have a succession plan in place. There are numerous benefits to the owner, company, and successor owners. Below are six of the top reasons your Naples business needs a succession plan.
1. Help Ease Ownership Transitions
There will come a time when you will need to hand over the reins of your company to someone else, whether it is a family member, business partner, or trusted employee. A change in ownership can bring a lot of stress to a business. If there is no plan in place, the company can end up directionless and on a path to failure. A succession plan helps ensure that your business will survive this transition.
In addition to easing the ownership transition for the business and your successor owners, a business succession plan also helps your personal transition out of ownership. It can ensure your financial security after you step away.
2. Helps Your Business Survive the Unexpected
Life is unpredictable. Unforeseen illness, natural disaster, legal troubles, divorce, and other unexpected events can be the downfall of your business if you do not have a succession plan in place. You or your family members will be forced to scramble during an emergency and may be forced to sell the company under duress for a lower value than what it is worth.
A succession plan that strategizes for the unexpected absence or loss of a key person will protect your business during challenging times. This is especially important when there are multiple business owners. You do not want to become accidental partners with someone’s ex-spouse or children.
3. Identifies and Develops Leaders
A succession plan forces you to identify and assess the most qualified leaders within your company. Instead of making a rushed decision, you can take your time evaluating potential candidates and considering how they will perform as your successor. You are forced to step away from the day-to-day of the business and look at the larger picture.
By identifying leaders early on, you have the opportunity to develop their talent by providing opportunities for training and coaching. Developing talent and hiring internally ensures that leaders will be aligned with the company’s goal and values and have a deep understanding of your business.
4. Reduce Turnover
A succession plan decreases employee turnover. If employees know that there are opportunities to grow and the potential for advancement, they are much less likely to leave. A succession plan allows them to see what their future in the business will look like. Your employees will become invested in your company and want to contribute to its success. Not only will you have more engaged employees, but you will also significantly reduce turnover costs. Hiring and training employees is one of the highest expenses faced by businesses.
5. Reduces Future Conflict
A succession plan helps reduce future conflict at the time of ownership transition. Creating a succession plan gives you, your family members, business partners, and employees the time to work through emotions and the flexibility to make careful decisions that are in everyone’s best interest. When you leave your business, there will be a clear plan to reduce confusion. Additionally, members of your business can assist in creating the succession plan. The process of making the plan gives members of the business a voice to express their needs and concerns.
Having a succession plan is especially important for family businesses. If there are multiple children or family members, the fight over who takes over can destroy relationships forever.
6. Succession Planning is Easier Than It Sounds
Many business owners are overwhelmed by the task of making a succession plan. However, with the help of an experienced Naples business planning attorney, it is much easier than it sounds. It is important to realize that your succession is not set in stone and can be modified to adapt to your business’s changing needs.
The best time to create a succession plan is when you start your business, but it is never too late to begin the process. If you need to add a succession plan to your business, you should reach out to a local Naples attorney today.
Call A Naples Business Planning Lawyer
Now that you understand the reasons for a business succession plan, you need to get started creating one. You should contact an experienced Naples business planning attorney. With over 25 years of legal experience, Attorney James R. Nici can help create a business succession plan for your company. Contact our offices today at (239) 449-6150 or use our web form to set up a free consultation.