Having a business succession plan is vital for a smooth and orderly transition of ownership and management of a business in the event of the retirement, death or disability of one or more of the partners. Without strategic proper planning, this type of transition can cause the normal business operations to suffer and, in some cases, can lead to major interruptions forcing a premature sale of the business.
Business succession planning can ensure that the remaining partners have the funds necessary to buy the individual’s business interest, or that a potential buyer with the proper expertise is lined up ahead of time to keep the business alive.
The challenges many small business owners face include maintaining consistent cash flow and stable balance sheets, this can be an ongoing battle that consumes a lot of their time. Retirement often seems like a distant mirage on the horizon, let alone plans to hand over the business. However, establishing a sound business succession plan early in the game is the ticket for most business owners who want to handle life changes proactively, preserve a legacy and provide financial security to a loved one.