People update their estate plans to account for changes that affect their estate goals. Your business succession plan should not be an exception. To help ensure your company ends up in the right hands, you should alter your strategy when necessary.
Here are some life events that may cause you to re-examine how to hand off your business to your chosen successor.
According to Business Insider, the going rate for a business can change with the market cycle or the impact of laws and regulations. The dynamic nature of the economy can throw off your forecasted value of your business, which may yield a lower price for your company if you sell it.
The successor is no longer available
Even if you have someone in mind to succeed you or purchase your company, your would-be successor may decide to take a position elsewhere or not buy your enterprise. If so, you will need to identify another successor if you have not already done so.
You find new talent
As time progresses, your business may yield new talented workers. They might show qualities that make them valuable assets if you promote them high enough. Perhaps one of them might make a better successor than your current candidate. By updating your succession plan, your company could benefit from the new rising talent.
Changes in your family
If you and other family members own a business together, what happens in your family can dramatically alter the outcome of your succession plan. Some relatives may no longer want to be part of your business, and vice versa. Updates to your succession plan could help you include or exclude relatives according to circumstances.
Given all the possibilities which might impact your succession strategy, keeping your plan as current as possible is a necessity.