Successful succession planning

A succession plan is probably one of the most important things you’ll do when starting a business. Simply put, it’s a plan that determines what happens to your business should you retire or pass away. It ensures that your business continues to run according to your vision and protects your heirs and your investment.

Here are a few tips to help you put your succession plan in place.

Carefully study your options

The first thing you need to do is decide what you’d like to see happen with your business when you’re no longer around. Would you like it to continue and for a family member to take over? Would you like it to be run by someone outside of the family? Or do you want the business sold and the proceeds to be divided? These are important decisions you need to make for you, your family, and your dependents. Remember, this decision affects their future earnings from the business. You might want to consider speaking to a financial advisor or business specialist about your options and your wishes. There are also certain things that need to be put in place once you’ve made your decision, so don’t overlook the small details.

Know your business

The type of business you have determines the decision for the future of this business. For instance, if you’re a sole proprietor, your business forms part of your personal estate. If you are in a partnership, you need to consider a partnership agreement, or a business will, which will speak to your share of the business and what happens to it. There are more types of businesses which would need specific agreements or plans in place. You need to make sure you know which yours is and ensure you have the correct plans in place. Enlist the services of a professional who understands and who can draw up the correct documents.

Financial due diligence

You must understand your financial position and keep records of all transactions and financial statements. Should your succession plan need to be implemented, remember there will be tax repercussions, and your business needs to be prepared for it. Keeping a record of all financial transactions will ensure a smoother handover process and a better SARS experience. Once again, speaking to a professional is a must.

You can also contact FNB for more information and assistance on estate planning. They have a team of professionals to help you make the right decisions for your business. 

What do a television presenter, an entrepreneur, a social media lawyer, and a doctor-turned-self-made businesswoman have in common? They’re all #UnStoppable and will be inspiring other women to reach for the sky at the sold-out FNB Business Women’s Breakfast in association with East Coast Radio. The event takes place on 20th August at the Durban ICC. If you bought tickets to this exclusive event, we'll see you there!

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