You run your own business and have used that business to support your family for much of your life. Since you’ve had success in that business, you have assets. That means you’ve probably already taken the wise step of planning for the end of your life by creating an estate plan. No doubt, in your estate plan, you address whom you would like the businesses ownership to pass to.
That is a very important step in creating an estate plan when you own a business. However, it is far from the only consideration that you need to keep in mind when considering your business and the end of your time to lead it. You should also have a succession plan in place to protect your business when you are no longer capable of fulfilling your role.
What is a succession plan?
Like the name implies, a succession plan is a written document outlining how your company can perform the work you do on a daily basis and take steps to replace you when you leave the company. A succession plan can go into effect when you die or if you have to suddenly retire because of a medical issue.
A succession plan may include things such as passwords and account information from various important business accounts, as well as daily operations instructions and other similar information. The more complicated your role at the company and the fewer people you would trust to do your job, the more important it is that you create a cohesive and thorough succession plan.
The success of your business in the future depends on the right leadership
Whether you plan to leave your business to your family or simply want them to profit after you pass, you likely want the business itself to succeed when you are gone. It, like your family, is part of your legacy.
While you may trust your loved ones to carry out your wishes regarding the direction in which the company goes, they may not have the business acumen to successfully run it indefinitely. You could allocate the ownership of the company to them while asking that they fill your role with a competent professional.
Creating an outline of expectations for an executive who can fill your role as well as outlining your long-term wishes and dreams for the company in a succession plan will help your heirs and employees work toward finding the right person to take over when you can no longer work at the company.
Everyone from your family to the people you’ve hired and worked with over the years rely on you to manage the transition from one leader to another. If you don’t take the time to think of it now, that oversight could have devastating consequences for your Texas company.