Succession planning

Find the right strategy for selling your business or handing it over to someone else, whether it be an employee, a family member, a friend or another entrepreneur.

Table of Contents

Why plan for business succession?

A good succession plan will help the transfer of your business go smoothly, and allow you to maintain good relationships with employees and business partners. Succession planning helps you:

When do you start planning, and how?

Start planning early if you intend to retire or exit from your business as the process could take up to five years.

A business succession plan can help you make important decisions about ownership, maximizing your company's value and tax strategies. A plan should touch on some of the following areas:

It is a good idea to contact key advisors such as accountants, bankers and lawyers when developing your succession plan. Communication with your successor(s) is important in order for them to understand their roles in the business and to allow them to collaborate with you throughout the transition process.

What are your options?

It is important to look for an exit strategy that fits both your personal and business objectives. Some of the options to consider when planning for your business succession are:

Seeking professional services

The use of professional services is essential to the success of a small business, including its transfer to another owner. Professionals can provide knowledge and expertise in areas where you may have little experience. They can also round out your management team to ensure that your business is operating efficiently.

As an entrepreneur, there are four types of professionals you may wish to consult:

When seeking out professional help, choose carefully. Find someone with whom you feel you can establish a good working relationship. For first time meetings, be prepared to explain your situation and what you are looking for. Ask what services the firm provides and how it can assist you. Do not forget to ask how much the firm charges for its services.

What is the value of your business?

Before you sell or exit your business, you will need to evaluate your business revenues, assets, property, etc. A number of other factors will need to be assessed like future potential profit, competitors, intellectual property, and customer base. Buyers will be interested in your business figures and history. A business valuator can help you in determining the value of your business.

What are the financial, legal and tax implications of business succession?

There are many financial, legal and tax implications when transferring or selling your business. Each business and business owner has their own unique situation and seeking advice from a tax professional could help answer some of these following questions:

How do you prepare for transition?

Additional resources on succession planning


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