Business succession planning can be pivotal to protecting your investment in an enterprise and ensuring the longevity of that enterprise. While there is no cookie-cutter way to plan for the succession of a business, however, avoiding the following mistakes can be key leaving a business on your terms and minimizing your liabilities in the process.
Don’t Make These Business Succession Planning Mistakes
Assuming a family member will take over the business – Although family members may have helped start or run a business, they may not be willing to assume a leadership role when an owner is ready to retire. And making this assumption without speaking to family members can create extra stresses and complications in the succession process, especially if the selected successor is already committed to pursuing other professional endeavors.
Selecting an unqualified successor – Depending on the nature and size of a business, the right successor to take the helm may need to be someone with managerial, business or other experience. If, however, the business is left to someone who is not qualified to run it, the chances are that the business will not remain successful or profitable for as long as it could had a qualified successor been chosen.
Not sharing the plan with heirs or successors – Although business succession planning may cause some competition and conflict, discussing the plan – especially with those who may be successors – is critical, as this can help identify some extra plans that may need to be made now to avoid additional pitfalls or complications in the future.
Waiting too long to start the planning process – Business succession planning is a process that, in some cases, can take years to finalize. In fact, it’s generally advised that business owners start thinking about succession planning about 5 to 10 years before they plan on retiring. Waiting too long can force owners to compromise their plans. It could also come at an added expense, especially if an accident, illness or some other event forces a quick sale of the enterprise.
Developing a plan without the guidance of an attorney – This may be the single biggest mistake that can be made in business succession planning, as not working with a lawyer can significantly increase the chances of costly oversights, especially when it comes to tax issues, the sale of the business, etc.
For well over three decades, Thomas Downey and the other legal professionals at Downey & Associates, PC, have been providing individuals and businesses with the highest level of legal service for their litigation, business, property tax and real estate legal issues.
To learn more about our various services and how we can assist you, call us at (303) 813-1111 or email us using the contact form on this page. From our law offices in Centennial, we serve clients throughout Colorado and the U.S.
A business plan can be the roadmap to success and profitability for an enterprise. While traditional business plans are usually longer, detailed documents that include a number of sections and in-depth analysis, however, the business plan summary should only be about one page long.
Given that this summary may be the only thing potential partners, investors, employees or others read about your business (before making a choice to invest in or work with your enterprise), crafting a compelling business plan summary is essential. And, the most compelling summaries will typically be those that accurately and succinctly cover the following key elements:
An overview of the business – This should highlight the main points, including the structure of the business, the name of the enterprise, the primary business location and all of the business owners. It should also explain what the business will do or sell and what experience the owners have to position the enterprise for success.
A market summary – This aspect of a business plan summary should explain who the target customer base is for the business, how the enterprise stands out above competitors and what strategies the owner(s) intend to use to market and grow the business. If the enterprise will start out with limited products or services and then expand them, the plan for expansion should be explained here as well.
The business financials – Here, it’s important to discuss the startup costs for the business, as well as where the funds to cover these costs will come from (including whether some portion of these costs will be paid directly by the owner(s)). This aspect of business plan summaries should also explain the current financial status of the business/its owners, as well as the projected profits for the first six months, one year, or some other frame of time.
A plan for the future – This should clearly explain the vision and goals for the company, as well as the steps that will be necessary to take in order to meet these goal. Given the fact that these summaries need to be kept short, this section tends to work well as a series of bullet points.
Since 1983, Thomas Downey and the other legal professionals at Downey & Associates, PC, have been providing the highest level of legal service to our clients for their litigation, business, property tax and real estate legal issues.
To learn more about our various services and how we can assist you, call us at (303) 813-1111 or email us using the contact form on this page.
From our law offices in Centennial, we serve clients throughout Colorado and the U.S.
Employee handbooks can be essential to establishing good, lasting employer-employee relationships. While employee handbooks can cover a lot of issues, however, the following are generally the most important topics to details in these handbooks:
General employment info – This should provide an overview of the business, along with general employment policies, such eligibility for employment, employee records, probationary periods for employment, and disciplinary/termination procedures. If employees for a business are usually unionized or if they are commonly foreign workers, including specific information for these types of employees in this section is also generally advisable.
Standards of conduct for employees – This aspect of employee handbooks should generally outline the dress and ethics codes for employees, as well as policies regarding schedules, attendance, punctuality, telecommuting etc. If a business is subject to specific regulations or ethical rules, these should also be explained in this part of the handbook.
Workplace anti-discrimination and anti-harassment policies – If a business’ policies different from state or federal laws in any way, the differences should be explained in detail in the employee handbook. As part of this section, it’s also important to discuss reporting options for employees, as well as the general investigative procedures the business will use to look into discrimination- and/or harassment-based complaints.
Safety & health issues – This aspect of employee handbooks should discuss how a business is compliant with the applicable OSHA regulations. It should also explain how employees are supposed to report work accidents, workplace safety hazards, etc.
Employee compensation and benefits – With this section of employee handbooks, details regarding deductions for taxes, voluntary deductions for benefits and eligibility for overtime pay should be explained. Additionally, this aspect of employee handbooks should outline how and when performance reviews, salary increases, bonuses, etc. are administered (or available) per the company’s policies, as well as the various benefit programs offered by the company.
Leave policies – This section should detail policies regarding family medical leave, military leave, and leave for any other reason, explaining how these policies are compliant with state or federal law.
Developing Employee Handbooks: More Important Tips
Before issuing an employee handbook, having a lawyer review the provisions of the handbook for compliance with the applicable laws and regulations is advised. This can minimize future liabilities for business owners.
Reviewing an employee handbook on a regular basis – or whenever a business experiences a significant change – is also strongly advised, as this can ensure the employee handbook covers all necessary topics and issues appropriately and accurately.
Contact Denver Business Lawyer Thomas E. Downey
For experienced help forming a business or resolving any business legal issues, contact Denver Business Lawyer Thomas E. Downey. Since 1983, Thomas Downey and the other legal professionals at Downey & Associates, PC, have been providing individuals and businesses throughout the U.S. with the highest level of legal service for their litigation, property tax and business legal issues.
To learn more about our various services and how we can assist you, call us at (303) 813-1111 or email us using the contact form on this page.
From our law offices in Centennial, we serve clients throughout Colorado and the U.S.
Downey & Associates PC represents clients in Denver and in the surrounding Colorado communities including Englewood, Littleton, Aurora, Greenwood Village, Broomfield, Boulder, Westminster, Fort Collins, Colorado Springs, Adams County, Denver County, Arapahoe County, Douglas County, Jefferson County, Boulder County, Larimer County and El Paso County.
