by Tom McGirr
You’ve spent thousands of hours dreaming about, building and running your business. It’s not surprising, then, if you haven’t yet made developing a business succession plan a priority: Have I really spent this long getting here just to start thinking about getting out?
Research suggests that many business owners are reticent to begin thinking about succession plans. The financial crisis of 2008 only exacerbated this tendency: As retirement ages drifted northward and selling a business began to seem like a dream, many business owners hunkered down and went into survival mode. Thinking three or four years out was just too much in many cases.
Thankfully, 2015 is not 2008. Businesses are more stable and lenders are starting to feel more confidence. Things are looking up, and this means that now is the perfect time to begin thinking about your business succession plan.
Below, we take a look at some of the broad strokes of a succession plan:
What Is a Business Succession Plan?
A business succession plan is essentially a planned exit strategy that takes into account your wishes and goals. Whether your exit is voluntary (you wish to retire or sell) or involuntary (an illness or family commitment means that running your business is no longer an option), a solid succession plan helps ensure that when the time comes, the succession process runs smoothly.
Why Do I Need One?
You probably have lots of questions about succession planning. A solid business succession plan will raise and answer them all. You need a succession plan to protect your assets, look out for the interests of your employees and help prevent strife down the road when it is time to hand over the keys to your successor.
When Should I Start Preparing?
There is no time like the present to start thinking about the issue, but ideally you will begin planning succession in earnest 3-4 years in advance of your anticipated retirement date. This should give you plenty of time to assemble the team of experts you will need in your corner, assess your financial goals and examine the current economic climate.
Future posts will examine topics such as the role of a financial advisor during the sale of your business, the importance of assembling a professional team and more. If you would like to consult with a business succession planning expert within Columbia Bank Trust and Investment Services, a member of our team can outline our services and provide more information.
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