Succession Planning is about finding the right strategy to facilitate the process of handing over or selling your business to someone else to run as well as understanding and being prepared for what this process actually entails.

Succession planning is time consuming, this isn’t a process anyone should take lightly as you can’t simply “change ownership”.  Sucession planning is time consuming because of the complexities invovled.  Areas such as tax implications, perhaps family issues, and prepping/training your successor and much more.  This is why businesses should take a look around their organizations, because maybe it’s time to think hard about succession and if so, be sure to plan ahead.

There are several reasons why you should plan for succession, such as:  to maintain the service for your community and employees, provide security for yourself and all stakeholders (not to be confused with shareholders), to maximize your companies value, etc.  The reasons are really endless, but it is a vital area that many organizations simply don’t consider until it’s too late and complications arise.

As a business owner you should start planning for succession well in advance.  As mentioned, the process is intricate and time consuming; may take several years.  When creating a strategy there are several aspects that you should be aware of.  You will feel that it is important to ensure that both your personal and business objectives will be taken into consideration for your exit strategy and therefore seeking out help is important.

Thus you should seek professional assistance whenever possible.  As in any circumstance in which professionals are consulted they can provide their expert advice and offer their years of knowledge and experience to clear up any of  your personal grey areas.  Business Development Bank of Canada (BDC) consultants can also help to draft a transition plan and appraise your business.
Some common exit strategies are:

• Family Transfer-transferring ownership to a family member.  Be sure state clear time frames and parameters for the successor.
• Management Buyout-your management team buys out the company.  As they are already well aware of the operations of the organization.
• Third Party-where an outside entity buys your organization.

As Louis Pasteur said “Fortune favours the prepared mind”.  Succession is an inevitable aspect of business, and having a strong exit strategy in place will benefit yourself and your successor.  Ill prepared owners can often have their businesses undervalued when exiting or leave a family member with problems that are more burdensome than the expected fortune they thought they would be receiving.

As a business owner it is your responsibility to transfer the knowledge, skills, control, ownership, etc. to your chosen successor.  This will help to ensure your own financial future as well.  So, are you prepared?
For more information, please contact:

David H. Arsenault, MBA
Penticton Economic Development Officer
Office: 250-493-3323
Cell:  250-809-9006
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