Succession planning provides a clear outline of who takes over your role in your business should you become disabled or deceased. For small business owners, this is a critical component to estate planning. It ensures that your business can continue to operate and provide financial support to your family even in your absence. Here’s a closer look at why succession planning is important for small business owners.
Acquiring The Right Leader
As a small business owner, you retain business knowledge that is not easy to replace. If your heirs are involved in the business, then they may retain some knowledge. In most cases, an outsider may be needed to fill your shoes. In your succession plan, you should include some guidelines for acquiring the right person to take your place. Should a family member take over your responsibilities? Is there an individual in your organization that would be best suited? If there is a need to hire someone new, what qualifications and skills are important?
Building a Team
Most business owners wear many hats and are involved in all aspects of business operations. As your business grows, hiring employees to fill certain roles can help with succession planning. As you build a team, each person takes on defined responsibilities and make the business less dependent on any one individual.
Importance of Documentation
Much of what makes succession planning most difficult is the knowledge that you take with you and that becomes lost in your absence. You can address these challenges by preparing good documentation. From processes and procedures to critical resources, good documentation will make it easy for someone else to step in and run your business.
More on Why Succession Planning Is Important for Small Business Owners
You’ve worked hard to build a business to support you and your family. In essence, your family relies on your business just as much as you do. Allowing that business to continue operating is why succession planning is important for small business owners. Without a proper plan, your death or disability could mean the immediate end to your business operations as well. Contact Simmons & Schiavo for a review of your business and assistance with creating a viable succession plan.