Many of you own your own business. Have you thought about what comes next? Both for you and the company? With respect to your business there are only three options: You can die still owning it, you can pass it on, or you can sell it. Many entrepreneurs fail to realize that without succession planning there is no value in the business.
There are four triggers that can create problems if not planned for in advance. What happens if the owner dies? What if the owner becomes permanently disabled? What happens when the owner leaves? And what if multiple owners cannot resolve their disagreements?
Succession planning calls for certain events to trigger a change, such as those in the preceding paragraph, and sets forth the method to determine the value of the company at the time of such triggering event. Succession planning also encourages the owner to remember to dress up the business for sale at a later date. The owner should start early in preparing both herself and the company for an eventual sale.
There are numerous steps in the selling process, from creating your team, finding a buyer, setting terms, determining the appropriate structure, financing, and so on. The key is to plan, in advance, not to wait for a triggering event to set the wheels in motion.
In order to best realize the value of your business, run it with the objective of someday selling it.