What is succession planning?

*Article sponsored by MNP

An exit plan will help you feel secure now and confident in your future

When it comes to thinking about retiring and moving on from your business, it can seem like a daunting task. Taking the time to plan for succession, whatever that looks like for your business, will give you peace of mind and control over the process.

What is succession?

Succession planning is the process of developing a roadmap to selling or transitioning out of a business. This is done when passing on the business to family, selling to a third party or employees, or retiring and restructuring the organization.

What should a succession plan include?

When it comes to succession planning, there are a few things to consider:

  • When do you want to fully leave the business?
  • Does it matter whether you transition to a family member or current employee, or do you just want to sell?
  • What does the current leadership structure in your organization look like?
  • What do you want to do in retirement? Will you have enough funds?
  • What is your tax strategy? Is it optimized for a business exit?

What are the benefits of succession planning?

In the same way that a will helps determine how you want your estate to be divided, a succession plan gives you the control of exiting your business on your terms.

A few key benefits of succession planning include:

  • A business that plans for succession will be better positioned to sell.
  • Addressing the corporate ownership structure ahead of time can help minimize challenges, surprises, and taxes on the sale.
  • Creating a long-term plan will make you more confident in your future.
  • If your health declines or another emergency occurs, you can always accelerate the plan instead of trying to build one from the ground up.
  • If passing the business to family or an employee, you’ll be setting them up for success.

What’s the next step?

Succession planning is an emotional journey that involves thoughtful consideration. Working with experienced advisors will give you the comfort of knowing that you’re getting the most out of what you’ve built and someone to answer your questions along the way.

To find out what path to succession is best for you, contact Kerry Smith, National Leader, Family Office Services, at 778-374-2189 or Kerry.Smith@mnp.ca.