{"id":289639,"date":"2025-04-02T11:40:25","date_gmt":"2025-04-01T22:40:25","guid":{"rendered":"https:\/\/www.reckon.com\/nz\/?post_type=sbh&p=289639"},"modified":"2025-04-02T14:09:50","modified_gmt":"2025-04-02T01:09:50","slug":"small-business-succession-planning","status":"publish","type":"sbh","link":"https:\/\/www.reckon.com\/nz\/small-business-resources\/bookkeeping\/small-business-succession-planning\/","title":{"rendered":"Succession Planning"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” _builder_version=”4.23″ custom_padding_tablet=”” custom_padding_phone=”0px||||false|false” locked=”off” global_colors_info=”{}”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.23″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_padding=”||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f4f4f4″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” pac_dcm_carousel_specific_module_num=”0″ border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Copy paste body text here” _builder_version=”4.27.4″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]<\/p>\n

If you own your own business, especially a family business, have you put any thought into succession planning<\/em>?<\/p>\n

Succession planning is as important as a personal will. After all, what actually happens to your business when you retire, want to sell up, or, heaven forbid, pass away?<\/p>\n

Planning for these eventualities is a key concern for many business owners, yet it\u2019s an often-overlooked step that\u2019s easily lost in the busy mix of business life. So, if you haven\u2019t put any thought into succession planning, it\u2019s time to pay it some attention.<\/p>\n

What types of businesses need succession plans?<\/h2>\n

Succession planning is not confined to big enterprises. Smaller businesses need succession planning the same way listed companies do. Regardless of your industry and size, it\u2019s vital to develop succession plans to ensure continued success for your business as well as clarity around its future.<\/p>\n

In short, if you plan on selling your business or passing it on to a family member, you need a plan.<\/p>\n

Who should create a business succession plan?<\/h2>\n

Succession planning is not all about passing your business on to a child or family member, although this is certainly a primary mechanism. It also entails the process of selling your business to any <\/em>outside buyer.<\/p>\n

As such, every business owner that plans on selling or passing on their business or business assets, needs to undertake a succession plan.<\/p>\n

So, before any future event takes place, having a succession plan will help reduce headaches and financial loss. As the complexity of an enterprise increases and as many people affected by an exit increase, it becomes even more necessary to prepare an effective succession plan.<\/p>\n

Many business owners ignore succession planning because they believe that such a plan is not essential. This could be a mistake. For small businesses, while it may seem onerous or unnecessary to implement succession plans, you most certainly should.<\/p>\n

Selling up?<\/h2>\n

The best way to lay out how to sell your business is with a well thought out succession plan.<\/p>\n

Many small businesses have no exit or sale plans when they decide to sell. Life, business, and wealth for family business owners have overlapping links and are often difficult to disentangle. As a business owner, separating from your business can be tedious, but is essential if you\u2019re looking to sell.<\/p>\n

So, before you get into the nuts and bolts of selling your business to an outside party, you need a succession plan in place.<\/p>\n

Keeping the business in the family?<\/h2>\n

Should someone leave the family business, consider the legal obligation and impact this will have on family relationships. When it comes to family businesses, consult with your relatives and recruit expert legal advice to prevent disputes relating to property and inheritance.<\/p>\n

The succession planning process<\/h2>\n

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Right, so you\u2019ve decided to create a succession plan for your business. Good call. Where should you start?<\/p>\n

1. Nominate your successor<\/h3>\n

The first fundamental step is simple enough – nominate the party that will succeed you and take over the business. It\u2019s vital that this nominee is not only fully aware of what they are getting themselves into, but that they possess the requisite skills and experience to succeed.<\/p>\n

It\u2019s wise to have your nominee seek separate legal and business advice to ensure they have independent guidance as to the ramifications of succession.<\/p>\n

A nominee would usually be:<\/p>\n