Business owners should take cognizance of the fact that succession planning should be considered in a proactive and earlier stage.  Often, small business owners do not look far enough forward because they are reluctant to come to terms with the fact that someday someone else will take over their company.

A succession plan is essentially a strategy that determines the best way for you to exit your business while ensuring that the business plan continues.  Irrespective of what may be conveyed over the years to members of the business, without a formal plan, the future of your business will be left to chance, and inevitably a business that has become successful can easily fail.  The question is how you are going to make this happen while considering the best interests of you and your family.

The two central goals of a succession plan involve the implementation of effective management of the business after succession and to maximize stakeholder agreement in the succession.

Certain issues to address in the planning stage include consideration of whether the company stock will be controlled through a trust, whether ownership of the business should be transferred to a family member, to a non-family member or disposed of through a sale, management buy-out, management buy-in or voluntary liquidation, when voting control of the company should be passed to children or grandchildren, the types of rights that should be retained by the founding (or previous) generation and for how long, the primary objective of the company and whether it has been set out in a clear company policy.

The longevity of a family business is dependent on careful transition planning and on communicating the results of that planning to the right stakeholders at the right time.  It is important to recognize that the approach to a succession plan will vary depending on the circumstances of each company.

We would be happy to discuss your succession planning needs, to ensure that a smooth transition occurs and the continuity of your business in maintained.