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Creating a Business Succession Plan

The Law Offices of Kenneth W. Drake, Inc. Feb. 8, 2023

Business Succession Plan Text Written on Piece of PaperWhen drafting your estate plan as a business owner, creating a business succession plan helps enable the seamless transition of your company and its assets. In addition, you can identify and groom new leaders who will oversee the company's affairs in the event of your retirement, sudden incapacitation, or death. This way, you can ensure the continued operation of your business even when you're no longer in charge. 

At The Law Offices of Kenneth W. Drake, Inc., I'm dedicated to offering knowledgeable guidance and advocacy to clients in the legal matters of estate planning and business succession. As a seasoned California estate planning attorney, I can enlighten you about the benefits of having a business succession plan and guide you through the process of creating one for your company. My firm proudly serves clients across Woodland Hills, California, and throughout the San Fernando Valley. 

What Is a Business Succession Plan? 

Business succession planning can be described as the process through which a business owner identifies new leaders and establishes a feasible plan for the continued operation of their company following their retirement, incapacitation, or demise. With an actionable succession plan, you can transfer control of your company to someone else seamlessly and achieve peace of mind. 

Why Is a Business Succession Plan Important?  

Here are some important benefits of having a business succession plan: 

  • It allows you to identify and groom new leaders for the business. 

  • It allows you to choose the right person to take over the control and management of your business. 

  • You can provide details about how to manage and repay your business debts. 

  • You can replace important stakeholders when the time comes. 

  • It allows you to create an effective business strategy should you become incapacitated or unavailable. 

  • You can prevent or mitigate the adverse effect of your departure on the business. 

  • You can maintain an active and participatory role in selecting a business successor. 

  • You can give specific instructions about how to manage your business affairs and operations. 

  • You can leave detailed instructions about the distribution of wealth and business assets to inheritors. 

An experienced attorney can enlighten you about the process of creating a succession plan and help you navigate crucial decisions. 

What Are the Steps for Creating a Succession Plan?   

Here are the steps involved in creating a business succession plan: 

  • Identify key positions and roles in your business. 

  • Hire an attorney to guide you through the process and help develop an enforceable plan. 

  • Identify your business goals, needs, and values. 

  • Identify potential candidates for succession. 

  • Determine the necessary training and development for the transition. 

  • Develop a talent pool to step into critical positions. 

  • Increase your professional development efforts to assist your potential successors. 

  • Appoint a successor and do a trial run of your succession plan. 

  • Hand over critical roles and ensure ongoing commitment. 

A reliable estate planning attorney can guide you through the entire process, help you avoid potential pitfalls, and make informed decisions that are consistent with your business values and needs. 

What Common Pitfalls Should Be Mitigated? 

When creating a business succession plan, you should avoid the following mistakes: 

  • Adopting an informal strategy 

  • Focusing on the executive level only 

  • Making assumptions or lack of due diligence about your talents 

  • Relying on a single successor 

  • Failing to include all employees in the succession plan 

  • Overlooking long-term commitment and continued engagement 

  • Failing to integrate technology in your succession plan 

  • Not updating the succession plan regularly 

  • Keeping succession plans a secret 

A reliable attorney can help create an effective business succession plan, avoid common pitfalls and obstacles, and ensure a seamless transition of your business. 

Don't Risk the Future of Your Business  

Ensuring a smooth transition of your business to your children or anyone else requires having a well-detailed succession plan. Should you retire, become incapacitated, or unavailable, all stakeholders can achieve peace of mind from knowing that the business affairs are in reliable and competent hands. At The Law Offices of Kenneth W. Drake, Inc., I have the diligence and experience to advise and guide clients through the complex procedures involved in creating business succession plans. 

As your legal counsel, I can assess the value of your business, identify possible threats, and explore your available legal options. Also, I will prepare the required business succession documentation and outline a strategic exit plan. Using my extensive experience, I will walk you through the process of choosing the right successor and ensure a seamless transition and distribution of your business and its assets when you're gone. 

Never put the future of your business at risk. Contact me at The Law Offices of Kenneth W. Drake, Inc. today to schedule a simple consultation. I can offer you the personalized guidance you need to make intelligent decisions when establishing your business succession plan. My firm proudly serves business owners and entrepreneurs across Woodland Hills and the San Fernando Valley, including Ventura, Los Angeles, and Santa Barbara counties, California.