Importance of business succession plans for small companies

When New Jersey business owners first start out, they have many things on their mind related to growing their business. Fast forwarding to a few decades later, business owners of small companies may have issues such as health problems that force them to retire early. What happens to the business? This ideally would be outlined in business succession plans.

How does one go about creating a business succession plan? The first step New Jersey business owners can take is getting a clear idea of what they expect from their plan-who their successors are and what business takeover plan to follow.

The reality of life is that time is not on anyone's side-tragedy can strike at any time. The best way to ensure everyone's interests are protected is to create a business plan when business owners are active and can take decisions when things are less chaotic.

In addition to facing their mortality, business owners may also believe a few myths that can be overturned. There are many myths of business succession. Many business owners believe it's easy to sell their business, but the truth is that in this economy, it's difficult to find a buyer that will pay a fair price, let alone one who is ready to buy at the exact moment the business owner is ready to sell at the exact time the seller wants to.

Planning ahead can help avoid these problems and is critical particularly for family businesses. Finding a successor, training that person, creating a timetable and then executing the plan all takes time and effort. However, the end result - being able to retire while watching a business continue to grow - is undoubtedly the goal of many business owners.

Source: WealthManagement.com, " The Myths and Realities of Succession Planning For Small Businesses," David Scott, May 6, 2013

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