What effect is your presence likely to have on your successor and the other staff?<\/li><\/ul>It\u2019s important to address all these questions in advance and include them in your succession plan.<\/p>
Determine when you\u2019ll step aside<\/h3>
It\u2019s a wise idea to fix a date when you\u2019ll transfer the day-to-day running of the business to your successor. For example, this could be on one of your future birthdays. According to SCORE, a non-profit organization that provides advice to small businesses, a succession plan should be started fifteen years before this date.<\/p>
Setting a date gives you time to prepare for retirement, your successor time to prepare to take over, and your other staff time to anticipate a change in leadership.<\/p>
As the date approaches, it\u2019s appropriate to gradually become less involved in the business\u2019s management as your successor gradually takes over the leadership role.<\/p>
Plan an exit strategy<\/h3>
It\u2019s important to plan your exit strategy from the business considering all the tax, investment, and legal implications of transferring ownership. For example, the transfer of ownership may be subject to the gift tax if your successor buys the business for less than its \u2018fair market value.\u2019<\/p>
Seek the advice of your accountant, lawyer and other advisers, such as business valuation experts and investment professionals.<\/p>
Find out how you\u2019ll transfer ownership of your business. The most straightforward type of business for transferring ownership is a sole proprietorship because you have the sole right to sell it to whomever you want.<\/p>
If your business is a partnership or a limited liability company, other rules will apply. In these cases, ensure you base your exit strategy on expert advice.<\/p>
Effective succession planning gives you the reassurance that your business will be in good hands after you\u2019ve retired. However, it\u2019s rarely an easy task. Begin your succession plans as early as possible and seek as much advice as you need to make the transition as smooth as possible.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t