You have grown your business from a mere dream to a successful enterprise during your lifetime – but the work is never done and there is little time for anything else. However, one issue that should be addressed is “who will continue to run the business when I am no longer involved?” Business owners have a difficult time addressing this issue due to
- the disbelief that one day you will not be calling the shots on business decisions
- the inability (in your opinion) of anyone else running your business as successfully as you
But if something happens to you without a succession plan in place, all your hard work in building the business will be for naught.
It is well publicized that a large majority of small businesses fail in the second generation, and the number one reason is the lack of a viable succession plan. The owner must decide
- who is best to operate the business – family members, other partners, key employees or outside third party professionals
- whether your spouse is financially secure as a result of the succession plan
- whether all your children are treated equitably if the business passes to one or more children involved with the business
In other words, making sure that the children running the business are not set to fail because children not involved with the business have an ownership stake or own the real estate leased to the business.
I don’t like clichés, but one seems to fit in the scenario of the business owner: failure to plan is a plan to fail. Don’t leave matters to chance. You are a visionary with your business, be a visionary for the continued success of the business after you are gone.