You have likely spent many years building your business. It’s only sensible that you put plenty of effort into ensuring it lasts long after you are retired or have passed away.
Below are a few tips to help you create a smooth and successful plan of succession for your business:
- Begin planning early: You might consider planning an exit strategy with your business plan. This means that from the very outset of your business operations, you will have a general idea of how you wish to pass down your business interests. You will have plenty of opportunities to adjust these exit plans over time as the circumstances of your business ownership and your personal life change, but it’s good to begin thinking about succession early in the life of your business.
- Plan your training: Put together a cohesive plan for educating and training the next generation of your family to help them learn how to responsibly and competently run your business. You should have regular meetings with your family members and other heirs to go over all of your business plans and finances.
- Have clear roles determined ahead of time: To avoid any potential hard feelings or confusion after you leave the business, make sure you have already established clear roles ahead of time for the people who will take control of your company. You do not want anyone to be surprised or disappointed when the time comes to hand over the reins to your business.
- Encourage constant open communication: An open and ongoing discussion between you and your children can help you set realistic expectations for the future of the business. Having formal processes in place will help ensure this communication occurs with regularity and is clearly separate from your personal lives.
- Work with a trusted business advisor: Seek the assistance of a business consultant or attorney who has previously worked with family-run companies and who can assist you with your succession planning and transition. This outside expertise can be extremely helpful and prevent you from making potentially damaging decisions for your company.
- Address conflicts before they arise: If you have a thorough and clear business plan that addresses the business transition and who will take on which roles, you should not have a problem with conflicts. However, you should also consider if there are any existing feuds among family members that could complicate a future transition.
Having a clear and comprehensive succession plan is a major part of ensuring your business will last beyond your tenure and well into the future. For further guidance on succession planning and working on your business plan, speak with a trusted corporate planning attorney in the U.S. Virgin Islands.
Steven K. Hardy has significant experience in representing clients in many matters concerning small business formation, structuring and planning. He is a member of the Virgin Islands Bar Association and the State Bar of Georgia, and is active with the American Bar Association and the ABA Young Lawyers Division.