How owners in Michigan’s silver tide can prepare the way for successors.

Many business owners are so focused on day-to-day operations they don’t have time to ponder what happens when they’re ready to step away from the business. In Michigan, nearly one quarter of business owners are 65 or older and 53% are at least 55, according to Bridge Michigan. What’s more, at least half have no formal succession plan. If you’re part of this silver tide, here are considerations for getting out of the business you built.

Acknowledge the emotional element

A desire to leave a legacy for your family or community generates all kinds of feelings. There’s pride in what you’ve built and desire to keep the business going. The business may employ family members and employees, and there may be concern for their livelihoods. If you want to keep the business in the family and there’s no one to take over that can feel like a threat to both legacy and identity. Acknowledge all the emotions that come with thinking about a succession plan.

Be open to change

The business you run today isn’t the same one you started. By necessity, it had to adapt to new customers and changing markets. Preparing for successors means the business will need to change again.

Stepping away from a business means taking on a new role. Approaching the transition with flexibility and adaptability prepares the way for whoever takes over next. Helping set them up for success will help the business continue into the future.

When to plan

A succession plan may feel like something that’s good to have later but FamilyBusiness.org advises, “Have a plan in place well before you need it. You never know when a crisis will force a change in leadership.”

Test the succession plan

Testing the succession plan before a crisis is important for success, according to studies on passing on family businesses. You can start with small steps, like taking off one afternoon each week. Later, schedule bigger blocks of time away from the business. This way your successors can ease into greater responsibilities, and you can ease away from the day-to-day operations.

Get help for your exit plan

Getting out of your business may take more planning than getting into it. Turn to financial and legal experts to for advice. They can help you consider options that might not be on your radar, such as selling the business to your employees.

Another resource to tap is the state-supported Small Business Development Center at Grand Valley State University. This agency works with nearly 9,000 businesses a year on everything from setup to succession planning.

If you’d like help with your retirement plan savings, Consumers is available. Stop by an office or call us at 800.991.2221.

 

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