Four Good Questions to Ask Yourself as You Think about Succession Planning

A big part of being a successful business owner is your ability to ask questions. This innate curiosity allows your business to thrive, adjust and evolve. It's also a good way to begin planning for a successful future outside the business.  

Consider these four questions:

1. Where Do I Start? 

Securing a successful future commonly begins with determining what it takes to achieve financial independence. Working with a strong advisor team, you can quantify your financial needs and your personal and business goals. The good news is that once you determine the answer, you can work with your advisor team to implement strategies that allow your business to run well whether you're at the helm or not. 

2. When Should I Begin Planning? 

As soon as possible.  The earlier you begin, the more potential you can harness, including cultivating a next-generation management team, de-risking the business, improving operational efficiencies and building scalable processes, and growing the business.

3. To Whom Should I Sell? 

Without a plan for a successful future, an unexpected event could position owners and their families to have no choice or say in the matter. For example, an untimely illness or death could force a business owner, or their family members, to liquidate the business to simply pay the bills. 

By considering this question early on, you have greater control in the “who” and the “how.” As you consider transitioning your business, you'll likely have financial goals you want to achieve. And you may have a preference for keeping your business in the family, having trusted managers run it after you leave it, or a desire to protect your employees. 

Creating a plan early can help you identify what's important to you. It can also help you avoid assumptions. For instance, you may want to keep the business in the family but discover that no one in your family has the skill or desire to take over. 

4. How Much Do I Want? 

After determining the minimum amount you'd need to never have to work again, business owners can then ask a fulfilling question: How much do I want for my business? The answer to this question depends on what your ideal retirement looks like. You may want to travel the world. You may want to finance higher education for your grandchildren. You may want to donate to charity. To achieve these goals in ways that allow you to continue supporting your lifestyle, planning is essential. 

While many business owners view this question through the lens of how much money they can get selling their business, the flip side of the coin is how to minimize taxes on a business sale. This planning often requires the expertise of several different advisors from your advisor team.