Business Succession Planning | Bighorn Wealth Management

As a business owner, you know that the future of your company is just as important as its present. That's why you need to lay out a clear plan for the next owner of your business, which is a process known as business succession planning.

Throughout this process, you'll be making key decisions about who will run your business following retirement, death or disability. However, you don't need to go down this difficult path alone. Our experts will review your options with you and provide you with valuable insight on effectively changing business ownership.

How Does it Work?

The goal of a small business succession planning document is to provide the new owner with clear instructions on taking over the business. When executed correctly, this document benefits not only the successor, but you and your employees as well.

You want your company to be in good hands after moving on from your business, and a succession planning document helps give you peace of mind that it will be. You can include any relevant information in this document to make the transfer of ownership as seamless as possible.

For example, if there are purchase terms involved, it's a good idea to outline these as well as the sale price. It's important not to leave any critical information out of your business succession plan, as this helps avoid confusion and allows you to honor your unique vision for your company.

What Should You Include?

While crafting your document, be sure to consult a business succession planning checklist. This checklist details the key points that you should include in your final document, such as the following:

Potential successors: If you have a specific person or group of people in mind to assume ownership of your business, this is the first item to tackle on your succession planning document. List them in order of consideration to avoid ambiguity.
Timeline of your succession: You should also have a clear idea of when a business succession would most likely take place. If you have specific dates in mind, state them in the document.
Business valuation: This refers to the method of valuation for your business, which should be updated as needed.
Standard operating procedures: These include any employee handbooks, procedures, training documents or other relevant information to guide your successor through the onboarding process.

Why Is Succession Planning Important for Small Businesses?

Small business owners should take extra measures to secure the future of their organizations. Because many small businesses are family-owned, business succession planning plays a key role in supporting your family's financial stability in the long term.

Additionally, unexpected events can cripple the future of small businesses. By forming a comprehensive succession plan, you can prepare to handle these situations without putting your entire company in jeopardy.

To explore the numerous benefits of small business succession planning, feel free to reach out to us today. We can help you outline your specific goals for your company and support the long-term success of your small business.