Succession planning is typically viewed as an executive level issue for big businesses--who will succeed whom as people leave the corporation for whatever reason. But making plans for what will happen if something happens to you is equally important when you're the driving force - and maybe the only force - behind your small company.
You've worked hard, perhaps your entire life, to build your business and you don't want to see it crumble when you die. You also need to think about what would happen to your customers and employees if you become disabled or decide to retire.
If you die as a sole proprietor without making other provisions, the company no longer exists and its assets become part of your personal estate.
In the case of a partnership or corporation, the company can survive and your share becomes part of your estate, but someone needs to step up and take over, and you should decide in advance who that will be and how it will happen.
You want to make sure whoever takes over doesn't just drive the company into the ground. It's a good idea to groom that person ahead of time to step into that position; don't let him or her be thrown into the proverbial deep end of the pool without knowing how to swim.
You might also want to create a living trust to keep your business out of probate when you die. Talk to an estate planning attorney to find out the best way to do this.
Another important consideration is what it will mean to your customers if you are suddenly unable to work for any reason.
You want to make sure your customers are taken care of, so be sure someone--a spouse, relative, or trusted associate such as your accountant or attorney--knows where and how your files are set up and how to acces them so documents and information can be retrieved and customers can be notified.
If you have possession of your customers' property--whether tangible or intellectual--have a plan in place so it can be either returned or turned over to someone else who will provide the service you have been doing.
Though it may not happen often, if you are a small business-to-business operation, you may have a customer bring up the issue of succession planning, especially if you are providing a critical support service.
Be prepared to answer questions and put your customers' minds at ease by letting them know that you have considered all possible eventualities and have taken steps to protect them.
By : Jacquelyn_Lynn
You've worked hard, perhaps your entire life, to build your business and you don't want to see it crumble when you die. You also need to think about what would happen to your customers and employees if you become disabled or decide to retire.
If you die as a sole proprietor without making other provisions, the company no longer exists and its assets become part of your personal estate.
In the case of a partnership or corporation, the company can survive and your share becomes part of your estate, but someone needs to step up and take over, and you should decide in advance who that will be and how it will happen.
You want to make sure whoever takes over doesn't just drive the company into the ground. It's a good idea to groom that person ahead of time to step into that position; don't let him or her be thrown into the proverbial deep end of the pool without knowing how to swim.
You might also want to create a living trust to keep your business out of probate when you die. Talk to an estate planning attorney to find out the best way to do this.
Another important consideration is what it will mean to your customers if you are suddenly unable to work for any reason.
You want to make sure your customers are taken care of, so be sure someone--a spouse, relative, or trusted associate such as your accountant or attorney--knows where and how your files are set up and how to acces them so documents and information can be retrieved and customers can be notified.
If you have possession of your customers' property--whether tangible or intellectual--have a plan in place so it can be either returned or turned over to someone else who will provide the service you have been doing.
Though it may not happen often, if you are a small business-to-business operation, you may have a customer bring up the issue of succession planning, especially if you are providing a critical support service.
Be prepared to answer questions and put your customers' minds at ease by letting them know that you have considered all possible eventualities and have taken steps to protect them.
By : Jacquelyn_Lynn
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