How important is it to plan for the future? When several entrepreneurs were asked this question, most said that planning for the future was the most important aspect of running a lucrative business. Planning on a year-to-year basis is very important, but planning for the future is just as, if not more, important. It is all about adding value to your business.
It will help you to know exactly where you stand as you work towards the future.
Most entrepreneurs have one goal in mind: running a successful business. There is nothing wrong with that goal but as you work diligently every day by putting your blood, sweat and tears into your business, you want to be sure it’s going to pay off! Succession planning for the future will help you attain the core goal of not just running, but also selling or passing a successful business on to another party.
Succession planning cannot be started a few months in advance. The process can take up to five years to implement. The objectives of the process should be reviewed on a monthly and yearly basis.
The whole process can help to identify and develop the potential of and within your business. You will be able to set some clear objectives that need to be implemented over a period of time. This will help to make the transition period a smooth one.
Most associate succession planning with a business closing or being sold but it is also something that is used by many successful companies to plan future growth. The process helps to drive forward action plans.
Succession planning can also be about finding the right strategy and utilizing talents within the organization to add value.
When should you consider a succession plan?
- If you are thinking about closing or selling your business in the next few years.
- If you own a family run business and you have dreams of passing the business on to a family member or employee.
- If you want to add more value to your business because you eventually have plans to sell it.
- If you want to improve the employer/employee relationships within your company which will help solidify future retention and development.
- If you are looking at growing your business over the next few years and you need to make decisions that are both internally and externally based.
- If you are having problems identifying what your core values are and how they align with the future plans for your business.
Most entrepreneurs have a plan for the future but they may have never shared it or written it down. They may find that as each year passes, the right actions and steps have not been considered. Finally, the planned selling or retirement date arrives but unfortunately, they aren’t ready. They end up working a few extra years because they are unable to get the value out of the business.
Here are some useful resources to help you find out what you need to consider and the decisions you need to make in order to achieve a prosperous succession of your business:
- Succession Planning Guide from Canada Business
Putting a price tag on your business:
- Put a price tag on your business: A guide to business valuation from Canada Business
- What’s your business worth? From BDC
Other helpful links from Canada Business:
- Closing accounts
- Corporations Canada: Dissolving a Corporation
- Shutting down your Ontario Corporation
And finally you can download a free succession guide from RBC:
As a business owner you work way too hard! It is important that you take the right steps which include decisions from a personal and business standpoint. Succession planning can help you to protect the legacy of your business!
At Halton Region’s Small Business Centre, we are here to help you with all your business questions. One of the goals of the Centre is to empower small and medium-sized enterprises and give you the tools to achieve success. For more information about any of Halton Region’s Small Business Centre resources and services, and how we can help direct you to the right resources, contact us at 1-866-4HALTON (42-5866), www.haltonsmallbusiness.ca, email@example.com or visit us at 1151 Bronte Road, Oakville. Don’t forget to follow us on Twitter @haltonecdev and Facebook at www.facebook.com/HaltonSBEC.