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4 aspects to consider when thinking about business succession

Over the years, you have likely formed a great attachment to your business. It has undoubtedly provided you with various opportunities for achievement and success, and you may wish you could continue running your company until you die. However, most likely you will choose to step down from your prominent position in the company when you reach retirement age or when other factors lead you to feel the need for change.

Of course, you want your business to continue to have successes even after you are no longer part of its operations. In order to give your company the best leg up possible, you will want to have a useful business succession plan in place. This plan could help ensure that trusted and responsible individuals take the reins after you step down.

Make an advanced plan

Because business succession planning is not always easy, you may have many questions about the process and feel uncertain about where to begin. Fortunately, you are already on the right track by attempting to plan ahead. Too often, company leaders find themselves scrambling over sudden succession decisions because a plan was not made ahead of time. By considering your options now, you may prevent hasty decisions later.

Consider your company's future

When determining who to appoint as a successor, you need to take various factors into account. One of those aspects relates to the future of your company. What challenges may come about? What business strategy changes may prove necessary? Who will have a willingness to make those changes? In some cases, someone with a fresh view concerning business operations may help your company grow in the future. So even if you have a particular person in mind, he or she may not necessarily be the right fit.

Look at internal and external candidates

If you create your plan far enough in advance, you may have the opportunity to choose potential successors from your current employees and train them for the possibility of taking over in the future. These candidates may prove beneficial as they will likely already have a working knowledge of the company.

On the other hand, you may not want to rule out external candidates. These individuals may already have experience as CEOs for other organizations and understand the responsibilities that come along with such a role. However, external candidates are usually more likely to be fired or leave the job.

Get necessary parties involved in planning

Because business succession affects numerous areas of business, it is important that the CEO and board of directors play a role in choosing a successor and ensuring that the plan will meet company needs. In order to make sure that your succession plan has the necessary elements to address important aspects as well as remain legally binding, you may wish to consult with a Texas attorney.

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Plunk Smith, PLLC
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Frisco, TX 75034

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Plunk Smith, PLLC
Plunk Smith, PLLC