Many business owners think succession planning is only necessary when they are close to retirement. A plan should be in place long before that point. Life events such as illness, disability, death, or unexpected resignation can occur at any time. Without a plan, these events can cause financial disruption, legal conflict, and loss of business value.
A well-run succession plan ensures that the business can continue operating smoothly in the event of a leadership change. It includes identifying and training future leaders, setting clear terms for ownership transfer, and putting financial and legal safeguards in place.
Without proper planning, a business transition can trigger unnecessary taxes: capital gains, gift taxes, or estate taxes; and may involve complicated probate or litigation. For family-owned businesses, this can be especially problematic if multiple heirs are involved and expectations are unclear.
Lenders, investors, and even key employees often want to know what happens if the current owner steps away. A formal succession plan provides assurance that the business is prepared, increasing its credibility, financing potential, and long-term stability.
Succession planning is about more than the business; it is about the owner’s exit strategy. Whether their goal is to retire comfortably, pass the business to the next generation, or sell to a third party, planning early helps them maximize the business’s value and secure their personal financial future.
Our team at Nordstrom & Associates, PC helps businesses create clear and practical succession plans tailored to your specific needs.
