Real Estate Journal — Southeastern Pennsylvania — March 15 - 28, 2019 — 9C
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S outheastern P ennsylvania By Steven Staugaitis, Kreischer Miller Preparing for a successful exit from your business
A
s a business owner, planning for your exit can be a very emo-
or owners should be involved in the succession planning process, as well as any identifiable candi- dates. These candidates need to confirm their intention of really wanting to take over. Also, having an outside, independent entity such as a board of directors or ad- visory board can be helpful. The board can help balance decisions by removing the emotion, since they don’t work as intimately with the candidates on a daily basis. Board members are able to provide outside perspective and new, innovative ways for
evaluating candidates. 4. Create a contingency plan. It’s always a good idea to have what is sometimes re- ferred to as a ‘disaster plan’ in place. These plans are a set of key instructions for a spouse or the management team of a business to act upon in the event something happens to the owner. Unfortunately, there are situations where a key owner of a business passes away suddenly. If there is no clear direction left to anyone in the family or in the com- pany, the company may go out of business as a result.
Even if you’re not planning to exit the business in the near future, being prepared ahead of an actual event sends a positive message to employees and customers that you’ve built a strong company that is focused on long-term success. Steven E. Staugaitis is a director of audit & accounting at Kreischer Miller, an accounting, tax, and advisory firm headquartered in Horsh- am, PA that specializes in the unique needs of pri- vately-held businesses.
5. Consider what’s next. Invest some time to think about what you are going to do once you leave the busi- ness. The most successful transitions occur when own- ers take up an active hobby or participate on advisory boards of other companies. Showing up at the business every day can undermine the whole process and give the perception that a succession has never really occurred. The succession process needs to be mapped out like you would any other aspect of your business.
tional event. The r e a r e feelings of mortality — not only with your health, but also your role as the leader of a b u s i n e s s .
Steven Staugaitis
That may be why many own- ers wind up avoiding the topic altogether and fail to properly plan for an orderly exit. According to the Ameri- can Management Associa- tion, fewer than 20 percent of organizations are well prepared for the departure of a key individual. However, businesses that achieve long-term success typically are the ones that do a good job of planning for succession. The companies that effectively plan their leadership transitions can sustain positive momentum when the next generation leader is properly groomed and allowed to rise within the organization. Here are five succession planning tips to increase your chances for success. 1. Create a plan. The succession process involves evaluating several steps, including: • Identifying potential candidates to take over the business. • Training those qualified candidates. • Publicly affirming the decision. These action items are necessary to set the right tone and expectations for the organization and those around them. 2. Begin early. Success- ful transitions occur when sufficient planning takes place — five to 10 years from a planned exit is best. This timeframe allows for potential ‘false starts’ as cir- cumstances change. These can involve a shift in the operations of the business, the unplanned departure of candidates, or candidates simply not demonstrating the necessary qualifications to take over. It is important to start the process early in order to keep your options open. 3. Include key stakeholders. Certainly the current owner
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