Why is Succession Planning Important for Small Businesses and How an Attorney Can Help

Succession Planning

Building a small business requires an investment of time and money. Far too often, many small business owners have no plan for succession once their business is up and running. No plans for the who and how of how a business moves forward without the present ownership is risky. Succession planning serves as a safety net for ensuring your business proceeds according to your wishes.

Your Vision Versus Reality

If your business is family-owned, you may assume your family will maintain ownership when they have other plans. Additionally, your family may wander from traditional practices and take the business off course from the original mission.

Different personalities and other dynamics of families or partners are something to expect. However, without a clear, structured succession plan, conflicts can arise, such as:

  • Replacing a board of directors without consulting with other owners
  • Growing families that change the dynamics of the ownership
  • Sibling or partner infighting over control and power

Whether you decide to retire or face health issues, a succession plan is always a smart idea. There is no way to know the true effect a change in leadership may bring to your business — whether sudden or expected. 

A succession plan can serve as a roadmap for those charged with carrying on the business you built. Such a plan can provide you with peace of mind and helps others better understand how to move forward. 

Important Tips for Small Business Succession Planning 

It is never too early to begin thinking about succession planning. The daily demand of running a small business can consume your time, making these tips all the more important for succession planning:

  • Take the time to plan and make careful decisions: Set a goal to reserve a certain amount of time each week or month to brainstorm a plan.
  • Ask other businesses about their experiences: Talk with other small business owners you know and trust how they approached the process. 
  • Be open-minded: What may work for some may not work for your business, yet remain open-minded about necessary and potential changes.
  • Talk about the future with your team: Someone you may believe is best for a future leadership position may not want the responsibility.

Succession planning is a process that takes time. The dedicated focus of starting your small business or carrying on the tradition of a family business is understandable. While you may feel overwhelmed, it is crucial that you not forget to plan for tomorrow. 

How a Lawyer Can Help You

A succession plan relating to small business ownership contains legal elements that require careful thought. A succession planning lawyer from the Pedrick Law Group can help you ensure your plan is legal and what you desire. By working with the Pedrick Law Group, you can create a plan that:

  • Plans for a smooth transition
  • Outlines how you step down, retire, or move on
  • Plans for an emergency change of leadership if you become injured or ill
  • Determine what legal and financial documents need updating or created

These are just a few examples of how discussing your needs with a lawyer can help you. At the Pedrick Law Group, we help California small businesses by working with them to develop the right succession plan for their needs. 

No one small business is alike. The structure — whether family, partners, or both — is often complex and involves various interests, goals, and personalities. 

A lawyer from our team understands the often emotional attachment small business owners have to their work. The Pedrick Law Group provides caring yet professional services for small businesses that want to protect what they built.

How You Can Help Your Lawyer

There are action items you can complete to help your lawyer prepare your succession plan, such as:

  • Listing your business goals — financial and other
  • Deciding how to proceed in the event of the sale of the business
  • Gathering tax information and other data that may impact a plan
  • Identifying possible successors
  • Review estate plans that may affect a succession plan

Gathering important documents and outlining your plan can serve as a starting point for your lawyer. This important information can help them learn more about the business and structure the right plan for you. 

Small Business Succession Planning Matters: Contact the Pedrick Law Group Today

Time passes quickly as you manage the daily operations of your business. While it is impossible to predict the future, it is imperative to plan for it. A sudden illness or your desire to retire are major changes that can significantly impact your business. 

The Pedrick Law Group is ready to help you begin your succession plan. This important process takes time and requires careful thought. The sooner you reach out to us, the faster we can get to work for you. 

 Managing the details of your succession plan alone can confuse and overwhelm you. A lawyer by your side can ease your stress as it allows you more time to focus on your daily tasks.

The legal factors involved with a succession plan are vital to how or whether your business moves forward. The time to start planning for tomorrow is now. Do not wait until a stressful situation where succession is sudden, unexpected, and chaotic. 

If you are a small business owner without a succession plan, contact us. We proudly serve Orange County, Encino, and the surrounding area. Let us help you protect your business by providing you with our legal services. 

Small business owners deserve to know that the future of their business has a plan. The safety net a succession plan can provide your small business is worth the time and attention it requires. To get started on your plan, reach out to the Pedrick Law Group today online or by calling our Orange County office at 949-353-5934 or our Encino office at 818-217-8744 for your free evaluation. 

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