Top 10 Things to Consider for Business Succession Planning in Massachusetts

If you own or operate a business, regardless of its size, you need to have an effective and enforceable succession plan in place. If you should pass away without one in effect, it may be left to the probate court to determine who will take control of your business, and that might be the last thing you want. There’s nothing wrong with being cautious or being prepared. You should know the things to consider for business succession planning in Massachusetts.

Throughout your business succession planning, it may be helpful to retain the right legal help to assist you with every aspect of your situation. The help of a Massachusetts business succession planning attorney can often be indispensable in situations like yours, especially if you do not already have a valid succession plan in place. Your lawyer should have experience handling business succession cases like yours and be knowledgeable about business succession laws.

Hire a Business Succession Planning Lawyer

When you are attempting to cement your legacy as a business leader, one of the most important decisions you can make is to hire a business succession planning lawyer to help you make the right choices for your plan. A good lawyer can help you identify any mistakes you may have made with your plan or notice any issues that could become serious problems later. Matthew P. Albanese has devoted his career to assisting individuals with their estate planning needs.

Business succession is fairly common throughout New England, including Massachusetts. According to recent statistical data from the U.S. Small Business Administration Office of Advocacy, there were 722,819 small businesses in the state as of 2024, as well as 1.4 million small business employees. In 2024, the number of employed individuals in Massachusetts increased by 45,000. Having a succession plan is important for the company as well.

Consider Looking for Local Business Support

Running a business can be hard work, especially if you are running a small business that is also your livelihood. You may want to consider additional local support, like the Local Initiatives Support Corporation or MassDevelopment. Getting involved in your community and networking with other business leaders facing similar problems can be quite helpful.

Top 10 Things to Consider for Business Succession Planning in Massachusetts

When deciding on a business succession plan, a Massachusetts business owner must consider many factors. Here are 10 distinct considerations that you should make when deciding on your own plan:

• Define your vision and have clear, achievable goals. Focus on what you can control and what you really want from all this.
• Identify a clear successor. To determine who will run the business once you step down or pass away, you should consider many factors. They should have exceptional leadership skills, fit the company culture, be respected by employees, and, above all, be someone you can trust to fulfill your wishes.
• Work on financial planning and tax needs. Structure the transfer of ownership to avoid unnecessary taxes. Make sure you determine the company’s fair value.
• Create legally binding buy-sell agreements. Make sure you have all of this in writing to prevent any future ownership disputes among partners. There may be people in your inner circle who expected to be your successor. They might not take rejection well.
• Develop internal talent early on. Prioritize job training, mentorship, and clear career paths for the people in your employ who show real promise. This can allow you to start building your company’s future leaders.
• Be transparent with your employees and your family. Being honest with your workers builds trust and reduces uncertainty. Everyone who seeks to gain or lose from your succession plan should be included in its development.
• Retain the right people. It’s common for many employees to start looking for new jobs when they learn of a leadership change. Consider implementing strategies such as additional incentives or employment agreements to retain crucial employees the company needs.
• Have a contingency plan in place. Nobody can predict the future, but you can prepare for eventualities that will most likely occur. If you are concerned that you may die before you finish your plan, have an additional plan in place so the right people know what to do with the company in the event of your incapacitation or death.
• Have a trusted lawyer by your side. Throughout this process, you need the right kind of legal help, as well as financial advisors and accountants, to protect your interests.
• Document everything. Leave nothing to chance. Make your succession plan as black-and-white as possible. A clearly developed plan can prevent confusion and ensure your company’s new direction starts as soon as possible.

FAQs

What Should Be Included in a Succession Plan?

There are many elements that should be included in a succession plan. Above all, you want to have a clear successor, contingency plans in the event of your death, a development plan for training essential workers, and notarized documents for the transfer of ownership. Your lawyer can help you include everything you need in your plan.

Is There a Common Mistake Made in Succession Planning?

One of the most common mistakes in succession planning is starting your plan too late. The longer you wait, the less you will be able to include in your plan and the more unreliable it will be. You won’t have time to groom your successor, develop contingency plans, or prepare your workforce for the transition. In fact, the whole thing may be quite chaotic.

Which Three C’s Must be Addressed in All Business Succession Plans?

The three C’s that need to be addressed in every business succession plan are:

• Continuity. Ensure that the business can continue without you by establishing a formal leadership structure.
• Costs. Make sure your plan is cost-effective and that the change in leadership doesn’t negatively affect the company’s value.
• Compliance. Be sure that your company remains compliant with all state and federal laws and regulations.

Should I Hire a Lawyer for Business Succession Planning?

Yes, you should hire a lawyer for business succession planning. A business succession planning lawyer can walk you through the elements of your plan and prevent you from making any serious mistakes that could impact your company. You need someone experienced and knowledgeable by your side during a transition like this.

Hire a Business Succession Lawyer

At Albanese Law, LLC, we can help you secure a business succession plan. Contact us to speak to someone who can help.