Whether you are the sole owner or one of several with a stake in the business, chances are you have a lot on your plate. Owning and operating a successful company can keep you so busy that you fail to consider who will take over once you retire or pass away.
Business succession planning allows you to determine who is best suited to operate your company in your stead. You have several business succession strategies to choose from once you are ready to put a plan on paper.
Selecting an heir
Many owners dream of passing the family business to an adult child or other relative. Unfortunately, only about 30% of family-inherited companies continue to succeed. Before you choose a family member, make sure they want to take over and have the skill and business savvy to run the company successfully.
Passing the business to a co-owner
If you are one of two or more business partners or owners, it might make sense to pass your shares to one of them. Before putting this succession plan in writing, speak to your candidates in advance. It will help them prepare to receive or buy your shares at a moment’s notice.
Selling the company to an outsider
Sometimes, the current owner of a business cannot find an appropriate party to succeed them. When this happens, selling to an outside party can solve your succession problems. To pass on the company as smoothly as possible, take steps to formalize your operating procedures and get your business finances in order.
Learning more about business succession planning and Hawaii business law can ensure your business remains in good hands long after you leave the company.