The future of your family business might not be in the front of your mind as you go about your day-to-day routine. But if you have a defined plan that everyone is aware of, you can more effectively prepare for a successful transition when the time comes to put it into place.
Over several past posts, we discussed the steps to successfully transition your business:
- Making the decision to develop a succession plan
- Determining the value of your business
- Exploring all the options available for transitioning your business
- Ensuring that everyone understands the plan and their role in helping it succeed
- Setting a course of action
Now it’s time to work on the final step in your succession plan: executing it.
Your succession plan is a fluid document. It’s a fact of life that things don’t always go as you planned. Economic conditions may change, new regulations may impact your products or services, key personnel or family members may leave or change their mind about their role.
The key is not to give up or retreat. If conditions change, reassess your plan and determine alternative ways to reach your goals.
To help ensure the plan continues on course, hold quarterly meetings with key personnel and family members that focus only on succession issues. These meetings offer an opportunity to remind everyone what the plan entails and how each key person contributes to the success of the plan.
This is also the time to determine if the plan still makes sense under current conditions and provides the opportunity to change tactics if the situation warrants.
For example, the tax package that Congress recently passed makes the next two years the perfect time to gift interest in your business if this is one of your transition goals.
The most crucial element to help your plan succeed is that you, as the business owner, commit to the plan and schedule time to make sure it is executed properly. If you don’t believe in the plan or don’t take it seriously, it’s hard to expect the people around you to help you execute it.
Building and implementing a succession plan for your business isn’t easy. It takes a strong commitment and a lot of time and attention.
However, the process pays off in several ways. You’ll have peace of mind that comes from determining a logical exit plan for yourself, and you’ll know that all those around you know and understand your plan and willingly work to help you succeed.
You’ll know that the future of the business you worked so hard to develop has been determined, and the tactics to help reach that future are in place. And you’ll be better able to make strategic decisions about your business that may impact both current and future plans.
As the old adage goes, “Failing to plan is planning to fail.” Help ensure a successful transition for your business by beginning the transition planning process. Your accounting professional can help.
Follow Tim McDaniel on Twitter at TimTMcDaniel