Business Succession Planning in Jacksonville
Prepare Your Business For The Future With Succession Planning
More than 50% of all small-business owners in Florida are 50 or older, which means many of them are approaching the point where they really need to be thinking about how they want to transition the business to the next owner. Whether this means passing the business on to a child or other loved one, transitioning it to a key employee, or selling it to a third party, it is critical that everything is properly taken care of.
Did you know that 70% of businesses do not transition from the 1st to 2nd generation owners, and nearly 90% of businesses do not ever successfully pass to a third generation? Another disturbing fact is that fewer than 30% of all business owners have a written succession plan, which is why many businesses fail when it is time to transfer to a new owner.
A good succession plan will clearly address both the people and the money that are involved. This is especially important if your plan is supposed to generate the money you will need during retirement. With regard to the people involved, your succession plan may involve family members who are already familiar with the business. Their knowledge could help ensure continuity during the change in leadership.
Before you name someone as the successor, however, make sure you discuss it with them to ensure they are ready for the responsibility. Too often a parent will be extremely passionate about their business, but the child just sees it as a job. Taking these things into account can help ensure you make the best decisions for your future and the future of your business.
If your children or other family members don’t want to take over the business, or you don’t think that they would be up to the challenge, you may want to consider one of your employees as the successor. Long term employees often make excellent owners because they know the business better than anyone.
No matter what you decide to do with your business, it is a good idea to start planning for it today. Having a written succession plan does not mean that you absolutely have to follow through (unless there is a contract in place). If circumstances change, the plan can be updated as needed. By working with a business attorney to create a good quality succession plan, however, you can give your successor the best possible chance at success through the transition and well into the future
Whether you currently have a succession plan that needs to be updated, or you are looking to create one for the first time, we can help. Contact us by phone or email to discuss your options or setup a consultation today.