4 Practical Succession Planning Tips

Matt Schaeffer, CPA, CVA, CFF, is a local partner with accounting firm Carr, Riggs & Ingram (CRI), the nation’s 34th largest. Contact him at mschaeffer@cricpa.com or 727-324-1223.

4 Practical Succession Planning Tips

A successful company should have a future, and to preserve that legacy a succession plan needs to be considered when the time is right. There are many factors that impact the ultimate success of a succession plan and its implementation, but below are four practical tips for consideration while succession planning for your business.
(1) Define the Succession Plan’s Goals.
As an owner, what is most important to you in the succession planning process? Is it financial security for your family or continued employment for valuable team members? What about retaining local ownership versus merging with a larger company? Once there are defined goals, your CPA can assist in the drafting of a succession plan that enables success.
(2) Ensure a Willing Seller/Willing Buyer Scenario.
Many entrepreneurs hope that children/other family will want to inherit their business or dream that a larger company will want to buy the business. Both of these scenarios are based upon assumptions, so start by having honest conversations with those you’d like to be involved in the future of your business. It’s much easier to plan a transition after these discussions that encourage an honest assessment of future options and the needed preparation.
(3) Plan Efficient Financial and Tax Terms.
After personal blood, sweat, and tears are invested in a successful company, some business owners are appalled at the thought of gifting the business. But there are many tax advantages to gifts. CRI’s accountants and business advisors are able to assist you in determining the best tax minimizing strategies for your succession plan—as well as overseeing the financial transaction required for the business succession to occur.
(4) Review and Update The Succession Plan. Often.
Changes happen, and succession plans should be updated accordingly. So review it annually, or at least semi-annually, to account for changes in your personal life, business model, employees, competitors, and economic factors. Also be sure that as your client base changes, the succession plan covers client and vendor communications in the event of a sudden change.

Bottom Line

Succession planning is critical to any business’ long-term success. Realism and preparation are two keys to the success of a succession plan. For more details, visit our related succession planning video blog. Remember that planning now has the potential to pay off exponentially later, so contact the CPAs of CRI with any questions.

4 Responses to 4 Practical Succession Planning Tips

  1. Pingback: 4 Practical Succession Planning Tips | Bankers Advocate | Business Exit and Succession Planning | Scoop.it

  2. Andrei M says:

    Great post! Indeed you have a great way on how to sustain your business success because of 4 Practical Succession Planning. Well, business is a mind game, to improve or to ruin it depends on how you continuously sharpen your brain.

  3. Rachael says:

    One famous quote from John Maxwell is
    “Show me a leader without vision, and I’ll show you someone who isn’t going anywhere.”

    well…when an owner doesn’t have proper succession plans, his business isn’t going anywhere.

  4. James says:

    A mentor once told me that what defines a leader is the kind of legacy he left behind. These tips can really help ensure the continuity and long term success of a business. Great share! Thanks.

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