One area you may overlook when starting a business is to draw up a succession plan. You might argue this is unimportant because it will be years before you can pass on the reins and retire to a Caribbean island. Yet, you could need someone to take over running your business sooner than you think.
When you start your business, there is so much to deal with in the present that it can be hard to look far ahead. Yet, the future could be just around the corner. An accident or illness could leave you unable to manage your company any day.
What does a business succession plan involve?
There are two main aspects to a successful succession plan. You need to give someone the legal means to run the company, and you need to provide them with the knowledge to do so. Here’s why:
- Legal means: If you are the only one able to sign cheques and contracts or access the bank account, your business will grind to a halt without you. Consider giving someone power of attorney so they can allow the company to function if you cannot.
- Knowledge: All the know-how in your head will be good for nothing if you can no longer share it. Delegation makes it more likely others can carry on without you. Having a successor in mind and training your heir to the business as you go ensures your hard work will not go to waste if something happens to you.
Accidents or illnesses can strike at any moment. It is never too soon to create a business succession plan. No matter how small your business, many people depend on it continuing to function, with or without you. Working with an attorney can help you gain clarity and insight for your goals and the steps you should take next.