Succession Planning for Your Business

A lot of people work hard at starting and maintaining their own business or company, but few people think about what will happen to their business or company after they retire, pass away, or become incapacitated and are no longer able to perform their job function. Without proper planning, a business's future, including the future of its employees might not be secure. Here are a few important things to know about succession planning for businesses and companies.

Know What Succession Planning Is

Much the way people should have a will for their personal estate and effects to help indicate how their property should be divided after their death, a business a succession plan helps to decide how a business will be run after the business owner or company CEO retires, passes away, or becomes physically incapacitated and can no longer perform his or her job function. While a will often deals with property and other physical arrangements, succession planning works to find people (usually internal people within the business or company) to run the business or company after the retirement or death of the president, CEO, or business owner.

Proper succession planning will ensure that this business will continue to operate, even after the business owner leaves or passes away.

Know How Succession Planning Works

Succession planning involves hiring and training employees to fill key roles within the company and business, but how each role will be filled and to what extent will vary from company to company and from business to business. Succession planning for a large, multinational corporation will vary, for example, from that of a small family-run business. The sooner these plans are made and put into effect, for example by training internal employees for key positions, the better it will be for the business or company. In the end, the goal is to have business or company operations continue to run smoothly after the death of the business owner, president or CEO.

Know What Aspects of Operations to Consider for Succession Planning

Succession planning is not quite as simple as making sure there is an employee to fill the position of president, CEO, or business owner after that person has passed away. Cash flow, company assets, estates, gifts and trusts, tax planning, balance sheets, and property ownership can all effect a company or business's succession planning. Working with a professional and certified accounting team can help a business or company be sure that all aspects have been taken into account for the future benefit of the company, business, and all of its employees, stakeholders, clients, and customers. The sooner such arrangements can be made, the better for the operations of the business or company.

Succession planning helps to ensure that a business or company will continue to operate after the departure of a business owner, company president, or CEO. Training internal employees for key positions will help ensure this process goes smoothly, but there are also other factors to consider, like the company or business size, tax planning, property allocation, and cash flow, among other things. Working with a professional accountant can help ensure than any succession planning is done in the best way for all involved.

Miller Kaplan is a leading CPA providing tax preparation, business management and consulting services, including licensing and royalty audits, 401k plans, trademarks, financial and succession planning for high net worth clients, family offices, healthcare, entertainment, real estates, food and beverage industries. For more information on succession planning, visit Wikipedia.org.