I was sorting through my archives, and came across this post from a year ago. Still as relevant now as it was then. The New York Times ran an article on the benefits of having a succession plan for small companies. Small Business Guide.
The article profiled Plexi-Craft, a New York company that manufactures acrylic furniture. The owner worked on and in the business until his death at 86 years old. When he passed, his son realized there was no plan in place for what to do with the company. The story is ongoing and Plexi-Craft is now doing better than it was before. [images in this post are from current Plexi-craft website]
I see small businesses in Chicagoland with senior people behind the counter and running the shop. Sometimes there are younger people around, sometimes not. I wonder what will happen to these businesses when the owner retires or passes away.
What would happen with your business?
The article has a number of suggestions:
1. Identify your successors – decide who you want to take over, and evaluate the capabilities of potential successors.
2. Prepare the new boss to take over.
3. Deal with crucial employees – figure out a way to ensure that your top people will stay on.
4. Cover your tax exposure – have the business valued by a neutral source and take steps to get a plan in place that maximizes value and deals with tax issues in advance.
As an update, it looks like the business is going strong. Here is the current blog – Plexi-craft. Their newest prodcut is coming out this Spring – an Adirondack Chair.