What is succession planning?
At its simplest, succession planning is just as it sounds—planning on who might succeed you in your business. While you might believe you will go on forever, succession planning takes into account the “6 D’s” which can cause a change in ownership structure. Those are: death, divorce, disability, distress (financial, like bankruptcy), disengagement (retirement) and disputes (with your partners). A plan may be as simple as creating a will leaving your business to a child who is already the “heir apparent” to a complex analysis of how to increase profitability over a several year period so that a sale of the company may be made at the best price. Different professionals may be involved, including:
*lawyers, who might draft agreements;
*Accountants, to help with financial and tax issues;
*valuation experts, to advise on the value of your business;
*insurance agents, to sell insurance to assist with buy-sell agreements;
*business consultants, to help improve business practices and
While it is easy to ignore the 6 D’s, we can guarantee you will face at least one ultimately (death, obviously!) and likely more as time passes.As Benjamin Franklin said, “if you fail to plan, you are planning to fail.”The first step toward getting a plan in place is to reach out and obtain information.
You can call Henry G. Grendell at 440-462-6503 for a free initial consultation to discuss your business succession plans.