Succession Planning 101
Posted on 10/23/2019 at 09:00 AM by Guest Writer Guest Writer
Setting Up Your Business Succession Plan
By Lisa Shimkat, State Director America’s SBDC Iowa
Why is Business Succession Important?
The average retirement age in the United States is 60-64 years old. The average age of self-employed individuals is just over 50 years old, which means many business owners need to consider what to do next with their business when they retire. Whether they are looking into passing the business down to a family member, transferring to a business partner or selling to a third party, having a plan helps in the retirement planning process.
How to Maximize Your Business Value
In order to maximize your business value, many things need to be considered:
- Review your sales process and determine how industry trends will affect the new owner. Introduce the new owner to your vendors and discuss how they will handle the transition.
- Make sure your social media sources and website are current and fresh.
- Verify all HR files are up to date and employee paperwork is in order, including personnel files, list of hire dates and pay rates.
- Double and triple check your finances including accounts payable, balance sheet and profit and loss statements. Verify everything matches your previous tax returns.
Who Do You Need on Your Team?
When drafting your succession team, it is important to have the trusted advice and opinions from a financial planner, insurance person, lawyer, accountant and a banker. They will be able to make sure that all decisions are in your best financial interest. They will help you through important considerations such as how you want to finance the sale of your business to ensuring that all your assets are in order.
Can an SBDC Business Advisor Help With My Succession Plan?
I encourage anyone considering a business succession contact their local Small Business Development Center (SBDC). In Iowa, there are 15 regional centers in all corners of the state that can assist you with your questions and connect you to additional resources. They offer free and confidential business advice. The key to success is starting your plan several years before you need to take action, as there are many variables to consider. A meeting with an SBDC Business Advisor is a great first step when you are considering a transition for your business. You can find your local SBDC office at www.iowasbdc.org.
Categories: Growing Business