Business Continuation and Succession Planning
Business continuation and succession planning are essential strategies to protect your business’s future, maintain its value and ensure a smooth transition when the time comes for you to leave the business.
Plan for the future of your business
Help your business and employees prepare for when you’re no longer involved.
Understanding business continuation and succession planning
Business continuation planning involves creating a plan to keep the business running smoothly during unexpected events such as the owner’s death, disability or retirement.
Succession planning is the process of identifying and preparing new leaders to take over the business, ensuring a seamless transition of ownership and management.
Benefits of effective planning
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Continuity and stability
Ensures the business continues to operate smoothly during transitions.
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Preservation of value
Helps maintain the value of the business and minimizes financial disruptions.
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Added security
Helps provide reassurance to you, your family, employees and stakeholders about the future of the business.
Key considerations
- Internal candidates
Consider preparing family members or key employees who understand the business. - External candidates
Look at potential buyers or external managers with the skills and experience needed to run your business.
- Buy-sell agreements
Establish agreements that outline how ownership will be transferred in the event of death, disability or retirement. - Estate planning
Integrate your succession plan with your personal estate planning to minimize tax implications and ensure a smooth transition.
- Regular business valuations help you understand the current value of your business, determine a fair price for the business during a sale or transition, and assist in financial planning.
- Clearly communicate your succession plan to all stakeholders, including family members, employees and business partners to manage expectations and reduce uncertainty.
- If a sickness or injury prevents you from working, business overhead expense insurance can help keep your business running by helping cover business expenses during a disability.
- If a crucial employee or executive passes away, key person insurance helps keep the business running smoothly by covering lost revenue and transition costs.
Continuing the family business
Few people have more estate planning issues than a family business owner. A family business is frequently the most valuable asset in the owner’s estate. Yet, many family-owned businesses don’t survive when the owner leaves, often due to poor estate planning. This article outlines special considerations for family-owned businesses.
Succession Planning for Family Businesses
March 6, 2024
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8 min read
Having a business exit strategy means planning for the unexpected - financial hardship, health challenges and even death. It also means having a plan for the transfer of ownership of your business when it comes time for you to retire.
How do I get started?
Effective planning helps position your business for success when you’re no longer involved and facilitates a smooth transition to new leadership. If you’re ready to start planning for the future of your business, reach out to your financial professional or we can help you find one.