Small business succession plans

Small business succession plans

| Aug 22, 2018 | Business Law |

According to a recent survey of 200 privately owned businesses, 58 percent of small business owners have no succession plans. These individuals have no strategies in place for how ownership should be transferred if unforeseen incidents should occur. While some small business owners in Ohio may not want to think about giving up their companies, it pays to be prepared.

Seventy-eight percent of the small business owners in the study attributed their failure to plan for succession at least partly to enjoying managing so much that they have no desire to begin thinking about any transitions. Forty-two percent of the owners stated that they had no time to plan, and 44 percent believed that there was no need to begin planning for something that would not occur until well in the future.

It is important that small business owners understand that operating a business and planning effectively go hand in hand. The act of planning early can give the business owners flexibility and the ability to serve in whatever role they desire before and after the transition of ownership.

Small business owners who have no succession plans in place are placing an immense burden on their heirs. In addition to addressing ownership and control issues, succession planning can also be used to address tax concerns, training for new owners or exit strategies if there is no family member or current employee available to take over the business.

business law attorney may advise company owners about what legal steps should be taken to ensure that there is a smooth succession transition. Legal counsel could help draft a succession plan that will maintain the viability of the business.