When business is booming, most business owners aren’t thinking about succession planning. Most owners are focused on the nearer future.
It is understandable, as engaging in succession planning is an admission of mortality and that one day, someone else will be running your business once you pass away.
Yet, if you want to ensure that your business continues on after you are no longer there to operate it, you will need to take care of your succession planning, which is best done by working with your trusted Cedar City accountant.
Potential Consequences Of Neglecting Succession Planning
If you aren’t quite sure that leaving succession planning until later is much of an issue, here are some of the potential consequences of not taking your planning seriously.
The company is vulnerable to disaster – Businesses of all sizes can be significantly impacted with a lack of succession planning. As the owner, you are usually the only one privy to important company details, from your accountant’s contact details to banking information. Without this kind of vital information, businesses can end up shuttered.
Business’ brand identity can become compromised – Often, successful businesses develop their branding and identity along with the overall purpose of the business. Yet, without clear succession planning, your successor may take the company in a completely different direction than what you would have hoped.
Lack of management preparation – Often, small business owners take on the majority of management tasks, with maybe one or two supervisors who assist. However, these supervisors likely don’t have all the needed information.
Say that you were preparing an entity restructuring for your business to help your company grow and not be heavily impacted by taxes. If something were to happen to you, there is no way for your supervisors or inheritor to know your plans or the direction you were hoping to move.
The intended heir may be cut out of the business – You may have been planning for one of your children or a trusted partner to take over your business when you pass on. But without clear succession planning, that future can be contested and may end with your intended heir being completely cut out of the business you grew.
Rather than leave your company vulnerable to these potential consequences—and likely other problems—it is best to tackle your succession planning as soon as possible. You can always revise your plan later, but it is better to have it in place.
How AA Tax & Accounting Services Can Assist In Your Succession Planning
It is possible to take care of your business’ succession planning without the help of an experienced accountant. However, it is difficult to plan for every contingency and cover potential gaps without the help of an accountant. Luckily, you don’t have to take care of your succession planning on your own.
Here at AA Tax & Accounting Services, you can work with our accountant to set your business up for future success. He can help identify potential weaknesses and provide financial insights into how you can leave your company in the best shape possible.
If you are ready to take care of your succession planning with our accountant, feel free to contact us today to set up your consultation.
Speak Your Mind