Every business owner knows that sound planning is essential to success. That means preparing for both the unlikely and inevitable changes that your organization will confront. Business succession planning is key to ensuring that your company can adapt to any contingency that may arise. Small businesses, especially, should consider enacting a plan to protect their interests and ensure their viability. Rosenbaum & Taylor’s New York business law attorneys can create a plan that is customized for your organization.
What to Know About Business Succession Plans
Business succession planning for a small business is in many ways like estate planning for an individual. Your company needs to be prepared for major life changes that will affect its leadership. These changes may include:
- Serious injury
- Leaving the business for another
If an owner or top employee leaves your business without a succession plan, it could be in trouble. And it could also cause legal problems.
The objective of a business succession plan is to minimize the risk of these and other issues. The right plan establishes clear guidelines for what happens when certain events take place that affect your business.
How a Business Succession Plan Can Help Your Small Business
Small businesses don’t typically have the same resources that large corporations do to weather the consequences of a serious storm. Significant changes in the lives of its top leaders could negatively impact a company. But a comprehensive business succession plan can mitigate these effects in the following ways.
Keeps Your Organization Efficiently Operating
Without a plan, your business could grind to a halt once you or another key individual dies or steps down from leadership. Smaller businesses have fewer employees who are prepared to fill the vacuum. However, a plan can ensure a smooth transition to new leadership.
Trains the Next Generation of Company Leaders
In a small business, there are fewer people who are capable of stepping up and leading. It is therefore critical to identify and train the right people for when the time comes to replace the old leadership. A business succession plan can set forth guidelines for how these individuals will be chosen and prepared.
Eliminates Unnecessary Power Struggles
The absence of a plan could mean chaos when someone leaves and creates a power vacuum. The last thing a small business needs is an internal fight over who takes that person’s place. The right plan will avoid this potentially destructive and unnecessary situation.
Conserves Precious Resources
By accomplishing the above goals, your small business can be focused on turning a profit and financially growing. Businesses that have no plan risk pouring their limited resources into avoidable and costly problems.
Preserves Important Traditions
The brand by which customers identify your business may be based on certain traditions. These values matter, so your succession plan should protect them. That means ensuring that new leaders will recognize, honor, and perpetuate what’s important to your company.
Reassures Key Stakeholders
Some of the most important stakeholders in your small business are customers, investors, and the general community. They need to have faith in your company to continue supporting it. Adopting a comprehensive succession plan signals just how serious you are about your organization.
Supporting Your Business for the Long Term
Rosenbaum & Taylor is a trusted legal ally of New York small businesses. We are committed to the long-term success of your company. Let us review your business’s needs and objectives, then get to work creating a succession plan. To get started, give us a call today.