Business Succession Planning

Succession planning is the process of determining who will control and make decisions for the business and who will share in the wealth created by the business. It is an ongoing, proactive process that ensures the organization will endure after current leaders have moved on, passed away or retired.

Organizations with a succession plan tend to recruit the right employees, train and develop them, and reward them with promotions and recognition. With proper succession planning, when changes take place at the top, capable professionals are ready to take the reins, which makes for a smooth transition between the owner and the successors.

One of the advantages of succession planning includes the opportunity to evaluate the business to determine leadership needs not only for today, but also for the future. A well-developed succession plan can help the company retain key employees who might otherwise leave. Succession planning ensures leadership continuity and financial continuity, which together provides a sense of direction about the company’s stability and serves to enhance its reputation.

Succession planning is an important part of estate planning; it helps eliminate confusion as to who will carry on the legacy of the business when the current owners are no longer available to make decisions. It names the new owner and a point person for matters pertaining to the company to limit family and/or business associate disputes.

Succession planning, when done well, is an important element in the long-term health and success of a business.

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