Business Succession Planning
Your business is your life's work. Imagine your desk with someone else sitting at it. That person could be someone you have chosen, trained, and trust. Or it could be someone you’ve never met. Without a succession plan in place, many businesses won’t survive beyond the initial owner.
After the owner exits:
- Small businesses that survive to the next generation: 30%
- Small businesses that survive to the third generation: 12%
SOURCE: U.S. SMALL BUSINESS ASSOCIATION, MARCH 2010. MOST RECENT DATA AVAILABLE
Business succession planning is an investment in the future of your business for the owners, employees, and clients. Planning is the key to future success for everyone whose efforts have helped the business to grow. The existence of a succession plan emphasizes your commitment to your business's long-term growth and creates confidence with customers, lenders, employees, and key suppliers.
Successfully transitioning a business is directly correlated to how early you begin planning. Research shows that business owners who began planning for their succession 10 years ahead of time had an 85% success rate while planning two years or less resulted in only a 25% success rate.
SOURCE: BLUEPRINTS FOR BUSINESS, FAMILY BUSINESS SUCCESSION PLANNING, 2009. MOST RECENT DATA AVAILABLE.
Spending the time to develop a succession plan can help you improve the value of your business, position you financially for retirement, maximize tax efficiency, transfer wealth effectively, make your business more attractive to potential buyers or lenders, and ensure that your business thrives into the next generation.