The process of transferring your business to another person takes a lot of preparation. For some people, the transition is the most difficult management process you go through in the life of your business. Unless you co-own the business with someone else, you will have to groom another person to take over your business for you. Even if you’re not planning on leaving your business within the next year, it’s always smart to start planning now.
Transfer of power: This is the process of transferring the control of the business over to the individual or individuals you have chosen to take over your business.
Transfer of assets: This is the process of transferring or planning the transfer of the wealth accumulated by your business to family members. The people benefiting from your assets do not have to be the people you have chosen to succeed you.
Business owners typically know who they are going to hand their business off to, whether it be a family member or someone who has been groomed to take over in the future. But once you have that person selected, a lot of preparation needs to go into training them to become the new owner.
Your successor should know your company inside and out as well as have outside training in stuff like management and accounting. They should begin shadowing you years before your planned succession in order to prepare them for the most successful transition.
A gradual transition is also helpful to a lot of successors. Start by giving them small responsibilities that they will take on once you pass your business on to them. As they get more comfortable, give them more and more of your workload. Then by the time you are ready to hand your business over, you will be able to shadow your successor for a couple of weeks to ensure your business will be in good hands.
If you’re a business owner ready to retire, you cannot dismiss or postpone the issue of succession planning. Our business succession attorneys will create a comprehensive succession plan to help you reach your desired objectives. Call us today at 602-274-9000 to discuss the details of your situation.