Why succession planning is important
Business owners in Connecticut and elsewhere may not have a plan for what happens to their companies after they die. This can be problematic if there are no family members or trusted employees who can step up and run the business. Even if someone is willing to run the company, it may take time and effort to convince employees and customers to remain loyal to the organization. In many cases, the owner of a small business is also the face of the brand.
Therefore, it can be difficult to replace the goodwill and rapport that the owner had with customers and workers. If the deceased owner kept poor records, it can be hard to determine who the company's customers are or what its financial health is. It is not uncommon for business owners to create succession plans and then not communicate those plans to the chosen successors.
It is also not uncommon for entrepreneurs to leave behind basic instructions that may not be helpful to a successor. Without a proper plan, those who are left behind may have trouble accessing social media accounts or other corporate resources. Those who run their own companies should also consider whether a successor would need to be licensed or have other certifications to legally run their businesses.
The loss of a loved one can be a stressful event for most people regardless of what that person did for a living. By creating a succession plan as part of an overall estate plan, a business owner may be able to help family members adjust to their new circumstances. Instead of having to learn the basics of running a company, it can either be sold or transferred to a new party who has the experience and desire to run it.