Small businesses are a vital part of domestic and global economies. However, succession planning statistics show that the vast majority of U.S. small businesses, even long-standing, successful ones, are facing a critical juncture. Over two-thirds of small business owners plan to retire in the next two years.

Without a solid succession plan in place, many of these small businesses, which have been integral to their communities for decades, will vanish. With nearly 50% of America’s workforce employed by small businesses, the success of these long-standing fixtures is paramount to local and national economies.

Unfortunately, today’s small businesses face a succession problem that threatens their future in their respective communities.
Business owners invest their time in building their companies. However, they must consider the inevitable scenario where overseeing operations is no longer possible. A pivotal aspect of any comprehensive business strategy is succession and estate planning – a strategy aimed at ensuring the seamless transition of the business legacy without diminishing its value. This strategic approach entails addressing key elements that may impact the business in the face of life’s uncertainties, such as death or disability. A well-structured succession and estate plan articulates the operational framework that will come into play in the event of the owner’s demise or incapacitation.

This involves identifying individuals to assume key roles and delineating the distribution of responsibilities, assets, and ownership for a seamless transition. Such planning is not exclusive to independent business owners; even individuals with ownership stakes in large corporations stand to benefit from such plans. Seeking guidance from reliable advisory companies such as SuccessionStrategix is crucial in building a unified estate and succession plan. According to Deloitte, the operational demands of running a family business or other closely held enterprise can be all-consuming, but it is vital that business owners take the time needed to assess succession planning. Failing to proactively address leadership or ownership changes can incur significant consequences, as the coming years may bring substantial transfers of wealth when businesses change hands and adopt new ownership structures.

The long-term survival of a business depends on proactively addressing those changes through strategic succession planning.