Danbury Business Attorneys Help Business Owners Set Up Succession Plans

Effective counsel for closely held companies throughout Connecticut

No small business should operate without a plan for ensuring a smooth transition in the event of departure, retirement, incapacity or death of one of its principals. A business succession plan can provide for how the departing owner’s share will be valued and for how that share can be divided or sold. Unfortunately, too many closely held companies in Connecticut operate without this essential document, leaving them vulnerable to business interruption and loss of reputation. Collins Hannafin, P.C. in Danbury can help you formulate the right plan and take positive steps to put it into effect. 

Experienced guidance for a smooth transition

For owner-operators of small companies, a business succession plan is as necessary as an insurance policy. The benefits include the following:

• Time to identify and train talent — Owners can carefully select successors at leisure and provide whatever training is needed. This guards against the loss of institutional knowledge that can hurt the enterprise’s competitive position. 
• Ensuring continuity — A smooth passing of leadership ensures that the core values of your company and your brand identity will remain, even as the transition opens up new possibilities under new leadership.
• Introducing clients to the next generation of leaders — People like to know who they’re doing business with. Introducing future successors to your customers can reassure them of the stability of the company and the enduring quality of your goods or services.
• Workforce morale and retention — A change in leadership can make employees nervous about the company’s future and consequently their own. Demonstrating that you have a plan to ensure capable leadership gives workers confidence.
• Stability aiding your bottom line — Businesses perform better without needless interruptions in operations. When leadership remains steady through a big transition, business goes on as usual, which keeps company revenues intact. 

A business retention plan also helps give shareholders or other equity owners and lenders confidence in future performance. Thus, your plan can make it easier to raise capital or obtain a line of credit.

Developing and communicating a plan

How a business succession plan is structured depends on your particular circumstances. Our experienced business lawyers will take the time to get to know your company and devise a plan to fit your needs and guide you through the transitional period. This process entails:

• Assessment — We will undertake a thorough evaluation of the steps necessary to find and train successors for owner-operators. 
• Planning — The plan must outline your process for selecting successors and ensuring their readiness to assume leadership. Owner-operated companies often choose from current employees or family members, since bringing in outsiders can cause friction and mistrust. However, the merit basis of the choice must be made clear. 
• Implementation — The plan should contain a timeline and description of the steps to set the plan in motion.
• Monitoring — The plan should include metrics by which to gauge success at intervals. If the process or the personnel are not working, adjustments should be made.

Your plan must have the support of other owners and of key personnel. New leaders need to have industry-specific knowledge in order to avoid lapses in crucial areas, such as regulatory compliance, which can expose your company to liability. When your succession plan is a team effort, there will be fewer blind spots and a greater likelihood of success.

Contact an experienced Danbury business succession planning attorney

Collins Hannafin, P.C. in Danbury, CT creates business succession plans for closely held companies throughout Connecticut. Call us at 203-885-1938 or contact us online to schedule an appointment.