Passing on a business is not always an easy thing for business owners to do. Not only must one identify the goals toward which one wants to direct the company itself and the means of getting the company there, one must also identify trusted individuals who share that vision and who are willing and capable of leading the company in the right direction.

The idea behind business succession planning, of course, is to ensure things are in place to make the company successful when the time comes for the business owner to take leave. Setting up the right environment and conditions does take time, though, and early planning is key to successfully passing on a business. 

Advisors say that one of the important things business owners need to do is develop a process for doing succession management on an ongoing basis. This process will surely vary according to the needs of the company. A lot of what is implied in this process is identifying the right individuals to take over key roles within the business. For this to happen, focusing on developing talent within the company is important.

Because all of this takes time and significant reflection on the company’s business goals and strategy, early planning cannot be underestimated. Business owners should not wait until they are on the verge of retiring or being unable to work to begin thinking about this process. In addition, it does help to work with professionals who understand not only the financial but also the legal implications of succession planning. 

Source: Wealth Management, “Financial Advisor Succession Planning: Start Early,” Phillip Flakes, August 6, 2014.