When you are starting a business, it is overwhelming at the beginning. You are creating a business plan and budget (hopefully), deciding on a business structure for legal and tax purposes, having business governing documents drafted, opening a business bank account, getting quotes on insurance, you may be deciding on employees versus contractors and making hiring decisions, finding a location for lease or purchase, obtaining required licenses and permits, and the list goes on. We are so focused on getting the business up and running, it is easy to overlook future needs.
I often work with clients as well as #SCORE mentees who are starting businesses or buying an existing business, and one thing that is often overlooked at that stage is what do they want to happen to the business if something happens to them? This question gets more complicated if you are in a business with one or more partners, particularly if that person is not your spouse, or if that spouse is not regularly engaged in the business. If you are not careful, you could easily find yourself in business with a former partner’s spouse or their estate. That is probably not the plan you envisioned for running your business.
Another issue is if you are in a specialized industry or one that requires a license such as attorney, certified public accountant, doctor, insurance agent, realtor, etc. – there may be restrictions on who can take over your business affairs if you cannot.
Your business has ongoing needs that will need addressed, whether it is a situation where you are in the hospital for a few weeks and can’t respond to clients or get bills paid, or you are deceased and decisions need to be made on whether the business continues, is sold, or closes.
The answers to what your business succession plan is are personal to you and your business, and the specifics depend on your corporate structure, your governing documents (if you don’t have these –that is another conversation), whether you have business partners, your business goals, and your overall estate plan.
If you would like to talk about your plans and how I can help you, feel free to contact me at email@example.com or 918-770-7810.