While you might intend to run your business for the next 30 years, it only takes one unexpected illness or accident to prevent you from doing so much sooner. If there is no succession plan in place, it’s not just your family that will suffer, it’s your employees and clients too.
Having a plan for someone to take over allows the business to keep on running without you – and that could provide a vital income stream for you or your family if you do fall seriously ill or die.
Here are some of the first things you need to consider:
Who will take over?
You may need a few options here. Let’s say that your ultimate goal is for your daughter to take over, but she is only 14 years old right now. While you could set your plan up so that she takes eventual control, you should have someone else ready to step until she reaches a suitable age, in case something happens to you in the next few years.
How can I give them the knowledge they need?
Thinking of your daughter and your plans: She’s probably busy at school and wants to spend her spare time with her friends, so how can you give her some insight into the business? Perhaps you could give her some paid work at the company during the summer breaks.
As for your intermediate option – once you pick someone, you might need to take them with you on specific business trips or bring them into the board meetings so they can learn a bit more about what stepping into your shoes would involve.
How can I give people the access they need?
You probably don’t want to give a 14-year-old access to your company bank account. You may not want to give too much legal or financial authority to your intermediate option, either. You do however need someone to be able to pay the wages and bills and sign essential documents if you become incapacitated. Giving a responsible party your financial power of attorney, which would only be triggered by such an event, is an option.
Getting help to learn more about your options can help you create a suitable succession plan.