PRINCE RUPERT – Too many small business owners won’t be. According to the Canadian Federation of Independent Business fewer than half of small business owners have a succession plan. Without one your business may be ill-equipped to carry on once you decide to turn over the keys or if you’re faced with a serious illness or injury.
Succession planning is about developing a framework to transfer ownership of your enterprise while maximizing its value, minimizing disruptions, and reassuring customers and employees. It’s an important task to manage properly, especially if you’re relying on wealth from your business to secure your retirement.
The following steps should be front and centre when creating your plan:
- Identify your successor. Whether you opt to sell your business to a third party, or prefer keep it in the family, with business partners, or key employees, ensure your chosen successor has adequate resources to purchase the business and the skills to manage it.
- Map out your strategy and communicate it. Establish milestones and timelines for what needs to be done. Remember to involve outside experts like lawyers, tax specialists and financial advisors early on. Succession shouldn’t be a secret. Getting the commitment and support of management, staff, and family can help move things along more smoothly.
- Do a realistic valuation. Overestimating what your business is worth can put a crimp in your plans if the final sale figure comes up short of your expectations. Consider bringing in a business valuation professional to look at your operation objectively and determine a realistic asking price.
- Guard against the unexpected. Death or incapacity could be devastating to your business. Make sure you have the proper insurance and contingency plans in place if the worst should happen.
- Revisit and revise. Succession planning isn’t a single event- it’s a process. Revisit your plan and revise it as needed.
Just like your business your succession plan will be unique. At Northern Savings, our Financial Services experts will work with you to focus on what’s important, for your enterprise and your future. More than 2,500 businesses in Prince Rupert, Terrace and on Haida Gwaii trust Northern Savings with their business financial service needs.
For more information on succession planning, or other business financing needs contact Rosa Miller, Manager, Business Member Services Northern Savings Credit Union . Phone: 250.627.3635 | Email: rosamiller@northsave.com.
