Prepare Now To Pass On Your Business To Your Successors

It is never too early, as a business owner, to anticipate the ideal endgame for your enterprise. Do you hope to grow your business and sell it for a profit someday? Do you hope to work at your chosen occupation your entire life if possible? Or do you hope to pass on the business to your business partners or adult children? Whatever long-range plans you have in mind, legal advice on business succession planning and business exit planning can help you clarify your goals and work toward them purposefully and constructively.

At Messick Law, PLLC, our clients are both individuals and businesses. We help business owners align business succession plans and business exit plans with their personal estate plans and adapt confidently to changes in finances, family structure or business makeup.

Plan For The Future Methodically And Intentionally

As your business matures, you will likely discover directions for the future, such as:

• Which parts of the business should endure long term
• Which parts may be partitioned off or discontinued at some point
• The unique talents that your top business partners and/or your sons, daughters or other family members bring to the table

Combining these insights with long-range fiscal and branding goals can help you devise a quality succession plan for your business that will help each part of the business flourish to the greatest extent possible.

Our business succession attorneys can help you map out ways to minimize taxes, prevent legal challenges and otherwise use business savvy to your advantage. Proactive planning can save your business money down the road and help avoid litigation as well as prepare to survive any legal challenges that may arise. Business succession planning may even be the key to your company’s survival in a competitive marketplace.

Types Of Business Succession Plans

When planning for the future of your business, two key succession strategies to consider are long-term plans and emergency plans:

• Long-term plans: These focus on preparing for a gradual transition of leadership, typically involving grooming a successor over time. This approach helps to ensure continuity and stability, allowing the business to thrive as leadership changes hands.
• Emergency plans: These are designed for unexpected events like sudden illness or death. These plans outline immediate steps to maintain operations, helping ensure the business does not falter during a crisis.

Both types of succession plans are crucial for protecting the future of your business. By combining a long-term approach with an emergency strategy, you can ensure your business remains resilient and adaptable, no matter what challenges arise.

Key Components Of A Business Succession Plan

A business succession plan that is easy to implement when the time comes possesses the following elements:

• A written discussion of how the company will identify and develop future leaders for critical positions within the business
• A proposed timeline of when and how fast the transfer of power would take place
• A detailed explanation of how business ownership and control of the company would legally change hands
• A communications plan for announcing the succession to various stakeholder groups
• A plan section that lists financial and tax implications related to the change and explains how they will be addressed

Our attorneys can help you draft your business succession plan, ensuring no critical detail is overlooked.

Potential Pitfalls For Businesses Lacking A Succession Plan

Failing to establish a succession plan for your business can expose your company to significant risks. For example:

• Without a clear plan in place, leadership voids can emerge, leading to confusion and a potential power struggle among remaining stakeholders. This lack of direction can cause operational disruptions and negatively impact the company’s performance.
• Risk of losing key clients or employees. Clients and top talent may lose confidence in the business’s future if they perceive instability at the top, leading to potential departures that could weaken the business further. Also, without a succession plan, the business may face financial difficulties, especially if there is no designated successor to manage financial affairs or secure funding during the transition period.
• Risk of diminished value. If a sudden transition is poorly managed, the business may lose value, making it difficult to sell or transfer ownership on favorable terms. This can have lasting repercussions on the company’s legacy and the financial security of its stakeholders.

Regular communication with all stakeholders and involving them in the planning process can enhance the plan’s effectiveness, helping ensure a smooth and successful transition.

Schedule A Business Succession Plan Consultation At Your Convenience

Ask for a lawyer’s help with needs analysis, risk management and step-by-step positioning of the right people and resources needed to make your business succession plan a reality. Our experience, dedication and preparedness can be assets for growing and preserving your Minnesota business.

From law offices in Saint Paul, Woodbury and Faribault, we serve business clients throughout the Minneapolis-St. Paul metro area and beyond. For customized business succession plan strategizing, call 651-505-2655 or send an email inquiry.