Owning a small business may have been your dream since a young age. Now that you are older and have successfully run that business for years, you may feel ready to plan for your company's continued success after you no longer play a part in the everyday operations.
Even if you do not plan to retire immediately, having a business succession plan in place is wise. You may feel a sense of security in knowing that you have prepared your business for a smooth transition in the event of your retirement or other events that may result in you no longer participating in the company. Of course, it is also important that you make your plans legally binding.
Factors to consider when planning
The aspects of your business that you need to consider when creating a succession plan will vary, depending on the exact nature of your company, your employees and your future wishes for its operations. Some factors to assess when considering your plan include the following:
- The value of the business: The value of your business is important because the amount that you own will play a significant role during succession, especially if you choose to cash out.
- Who you want in charge: Undoubtedly, you consider your small business an important part of your life and your identity, and because of that, you want to give your full consideration when choosing a successor who will uphold the values of the company and have the necessary strengths to run it.
- Purchase agreements: You may also need to implement purchase agreements into your plan that account for your retirement or your sudden passing.
Again, you may need to consider a number of other factors, depending on your specific company and wishes.
Your business succession plan can act as a useful part of your overall estate plan. You certainly do not want to have plans in place that others simply ignore, so creating legally binding succession documents is in your and your company's best interests. Gaining professional legal assistance with this endeavor from an Illinois attorney could help you understand your planning options and create a plan with which you feel comfortable.
Planning ahead can help account for a number of variables that could affect your business, including retirement or death, and leaving instructions can ensure that your company moves forward as smoothly as possible.