Succession planning is the process of preparing your business for a leadership transition when you are ready to leave the company. It refers to the approach and preparation of identifying successors within the business and helping them with the process of developing their skills and experience so they can replace the existing leaders at a future date.
If you are not transferring the business to family or key management staff, you may be looking at a third-party sale. No matter which option you use to secede your business, you will need a plan. The process (often called exit planning) includes a comprehensive approach that factors in the impact to the business owner, their family, employees, and the community.
By transferring to family
By transferring to key management
By selling to a third party
The option you choose will guide the plan you develop. The biggest part of the process is planning ahead to ensure there is time for you to understand the value of your business and take steps to increase the value, if needed, before your exit.
This plan is your roadmap and should be started at least five years before your projected exit date. Getting a written plan in place, even if you adjust along the way, will give you the best possible outcome.
Below is a sample 7-year timeline showing the steps in the exit process. This timeline can be adjusted based on your schedule. The earlier you start, the more successful your transition will be.
The most effective way to create a plan is to gather a team of advisors who understand your business.
The plan needs to include a financial analysis, company valuation, due diligence review, tax planning strategies, and your estate plan development. This is not the time to go it alone. You will benefit from working with a team that has specialized training and experience in the process.
Business professionals need easy access to information to make timely decisions. SVA has what you need, when you need it. Choose a topic below or just contact us directly. Our expertise is ready anytime you need it.
The exit planning process has many moving parts. This eguide will provide the information you need to prepare for the successful exit of your business.
This eGuide explains how estate planning is to consider when planning your business exit strategy.
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