Owning a business gives you an exciting amount of control over your life and future. In addition to being your own boss, owning a company gives you the chance to pass your success on to the next generation.
While many people don’t put much thought into it until it’s too late, a business success plan is crucial if you want your business to continue thriving or if your goal is to ensure that the business goes to the right people. Following are some potential negative outcomes if you don’t have an effective plan in place.
Potential conflict among relatives or shareholders
Losing a loved one is never easy for a family. When your loved ones are trying to sort out your final affairs, matters can quickly become complicated if there is no succession plan for the business. In far too many cases, disputes arise between family members as to who should receive shares. Disputes also arise between existing shareholders if there is no succession plan.
If you already have an estate plan, then it’s important to make sure the estate plan corresponds and with your business succession plan. This is important for your peace of mind and your loved ones’ peace of mind.
Instability for your business
In addition to causing stress for your loved ones, when you do not have a succession plan for your business, your company can suffer, too. Often, when a business becomes unstable after the death of an owner, employees will leave, and shareholders will begin to worry about their investment.
A business succession plan creates stability for the transition so that employees and shareholders can be sure of the company’s future. Additionally, a succession plan can mean that the next owner is trained and prepared to take over the business.
Creating a business succession plan benefits both your business and your loved ones. You should talk to a skilled business and estate planning attorney who can help you consider all of your options when creating a business succession plan.