If you are like many small-business owners in Illinois, you may not have a complete transition plan in place should something happen to you. A business succession plan is much like a personal estate plan — it tends to get put off in favor of what seem like more pressing matters. However, having contingencies in place is sometimes just as important as addressing the issues right in front of you. Business succession is one of those instances.
Also similar to personal estate plans, there would probably be some paperwork involved in any succession plan you created. Setting up leadership handoffs that you can trust is just as much a matter formality as it is a matter of building strong professional relationships.
The details of your plan would probably depend heavily on the ownership structure of your company. For family-owned businesses, you would probably want to give some thought as to the effect the business’s transition could have on your loved ones. For example, you may want to think about transferring ownership to the next generation, preventing disputes between branch families or even dealing with some issues in your personal estate.
As mentioned in a U.S. Small Business Administration seminar, there are many reasons for selling a business. You may want to determine before planning if those you intend to inherit your company want to sell it. If so, it could be prudent to review the situation from a financial and legal perspective, determining the best course of action for everybody involved.
Your succession plan should be as unique as your company. Please do not regard this as advice for any material situation. It is only background information.