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Business Succession Planning

Business Succession Planning

Having a business succession plan is critical once a company has been launched. Illness, injury, disability and death can wreck havoc with the best business plan. As owners near retirement, a succession plan is essential. Whether you operate your business as a sole proprietorship, partnership or corporation, meeting with an attorney, accountant and/or valuation expert can help determine which exit strategy is best for your company.

Here are some key areas for an owner to consider in designing and implementing a succession plan:

  1. Choosing a successor. If you intend to pass the business down to a family member, first you need to determine if there is a capable family member interested in taking over, without making any assumptions. Often, parents intend to pass the family business down to their children; however, their children may not always want to take over the business, but instead follow their own career path. If a family successor isn’t available, you may consider transferring the business down to a loyal employee(s) through a buy out option.
  2. Training your successor. Whether you turn the company over to a family member or current employee, you will need to establish a timeline and develop a training schedule. Establishing a timeline with interim deadlines to accomplish certain steps will help stay on track and set a known expectation as to when you will step aside. Throughout the training process, it is important to gradually delegate your tasks and responsibilities to your successor to make for a smoother transition. If you neglect to set a deadline, your successor may back out if the transition period takes too long. Transparency is crucial during such transitions, not only for the successor but for the other employees, clients, and investors as well.
  3. Stepping aside. Once your deadline approaches and your successor has been fully trained to assume the position, it is important to step aside and let them take control. This step is difficult for many entrepreneurs, as their business is usually treated like their baby. Ideally, you have chosen a successor in whom you feel confident entrusting your business.

Keep in mind that as your business changes over time, you may need to amend your succession plan. Once you begin the exit process, however, you may be contractually bound to continue as agreed upon. If you have any questions or would like to discuss which exit strategy or succession plan is best for your company, please feel free to contact me.


Pete Palmer, Tax Partner


PKC Kuebler will be hosting a complimentary luncheon on May 18th, 2017 at the Truax Building in Old Town Temecula. Our guest speaker, Kirk Michie, will review an alternative exit strategy in his presentation on “Selling Your Business, What you Don’t Know WILL Hurt You”. Please visit our website at or call our office at (951) 676-6555 to RSVP for the event– space is limited.


PKC Kuebler, APC is a full-service public accounting firm registered and licensed to practice as an accountancy corporation by the California Board of Accountancy . The information provided is intended for general tax and accounting needs. Articles are written for informational purposes only and should not be seen as any kind of advice. Content is accurate and true to the best of our knowledge, however, there may be omissions, errors or mistakes and it is advised you contact your CPA before taking any financial action. The opinions expressed in our articles do not reflect the opinions of any organizations in which we are affiliated with.

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PKC | Kuebler, APC

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Temecula, CA 92590
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