As a business owner, it is important to have a succession plan in place. This can make it easier for the company to thrive after you decide to retire or if an unexpected event leaves you unable to manage the business. However, according to a Wilmington Trust survey, 60% of small business owners in Massachusetts and throughout the United States don’t have one in place.

Figure out who will take over the company

The first step in creating a succession plan is figuring out who would be best suited to run your company in your place. In some cases, a family member can be groomed to take your place several months or years in the future. However, it is also possible to hand the company over to a key employee or a group of key employees who will represent the brand well.

Be as transparent as possible during the sale process

If you choose to sell the company to another person or business, that other party will want to feel confident about making a deal. This can only happen if you have financial records such as tax returns and profit and loss statements available. You will also want to organize any other data that may justify the market value that you have assigned to the company.

Buy/sell agreements can make a transition easier

A buy/sell agreement clearly states what will happen to an owner’s interest in a company if that person retires or is forced to leave. The agreement will stipulate how much the owner’s interest is worth and who is allowed to purchase that person’s stake in the business. Creating such a deal may prevent conflicts between family members or other owners in the event that you’re forced to leave the company suddenly.

For businesses of almost any size, succession planning can help to ensure that a company can outlive its original owner. An attorney may be able to help in the creation of such a plan or assist in making changes to one that already exists.