Business Succession Plan

BUSINESS: THE IN BOX Protecting Your Business Legacy by Shannon Davis

One of the top reasons small businesses fail is poor planning.

In business, we think of planning for financing, emergency reserves, management, and even planning to pivot when events dictate. But what about after we pass?

In our private lives, many of us have a will and life insurance for our families after we pass on, but what about the same consideration for our businesses?

Our health, fortitude and humanity have been tested at an exorbitant level over the past couple of years. We are more aware than ever that we need to plan for the unplanned.

What if a key player in the company leaves for a new opportunity or gets sick or dies? What if a partner dies and the estate demands a buyout? How will the company survive when those key players are critical to success?

Succession planning is defined as a strategy for passing on leadership roles, ensuring that the business continues to run smoothly after a company’s most important people move on, retire or pass away.

If the desire is for a business to continue when the key players are unable to actively fulfill the roles required, both a short-term plan, in case of accident or illness, and a long-term plan, in case of death or incapacitation, should be conveyed clearly in writing.

Initial steps include thinking about the people and positions in the company and start brainstorming.

Identify key positions and areas. What roles are critical to be filled? What are the tasks those roles fulfill?

Identify interested employees and assess capabilities. Who are the current employees or family members who could and want to fill those roles?

Develop and implement succession and training. Groom those people to seamlessly take over when necessary.

Evaluate effectiveness. Is this plan viable? What are the obstacles?

Review the plan annually or when there is a change in circumstances. Enlist the help of an attorney and a financial advisor to help formalize and implement the plan.

Plan to succeed.

Read more in Joy of Medina County Magazine, a locally owned, independent monthly publication.

Shannon Davis is a financial advisor, entrepreneur and resident ofMedinaCounty.Sheisanadvocateforfinancialliteracyanda HowMoneyWorkseducator.Shecanbereachedbycalling303- 916-3864 or by visiting https://howmoneyworks.com/ shannondavis