West Virginia Business Succession Plan Attorneys
Charleston lawyers help companies facilitate smooth transitions
Capable leadership is an essential element of a business’s success, which is why an abrupt or poorly planned change of leadership can be unsettling for a company, its shareholders and its customers. At Pullin, Fowler, Flanagan, Brown & Poe in Charleston, our business attorneys help companies plan for a change of leadership. Drawing on more than 30 years of business law experience, we craft individualized plans based on a company’s specific circumstances and needs. We assist in drafting emergency plans as a safeguard against the sudden loss or incapacity of a business owner, as well as incremental plans to pass the baton to the next generation at the appropriate time.
Benefits of business succession planning
All of us can probably name several businesses that have been around for more than a century. Those entities have all gone through numerous changes of the guard and have continued to thrive. One key to that success is a solid business succession plan, which provides the following benefits:
- Replacement of leadership — Small businesses are often run by a small group of owners and operators and sometimes only one. If any of those principals dies, becomes incapacitated or otherwise departs unexpectedly, the business could be left with no one in charge. A business succession plan prevents a lapse in leadership by specifying who will take over in the event of an emergency.
- Identification of key talent — The process of putting together a succession plan forces current leadership to identify potential candidates for assuming essential positions. These candidates might be exemplary employees or children of the owner.
- Preparation — A plan prepares future leaders to assume the reins and provides key employees with specialized training and development so that they can take over essential positions when required. The plan can also help the company’s workers and clients prepare for the transition. It also allows current leaders to prepare for their exit.
- Stability — Every well run business has a brand identity it needs to preserve and build upon. By easing in the next generation of leadership, a company avoids abrupt changes that can dilute or blur its market position or alienate loyal customers.
A successful business outlives its founders. You can start your company’s next generation of leaders on a firm foundation with a solid business succession plan.
Common errors in succession planning for small companies
Unfortunately, owners of small businesses often make mistakes that undermine their company’s future success. Many of the problems have to do with family dynamics, as they attempt to pass the business on to their children. Common errors include:
- Choosing the wrong successor — Transferring ownership to a child who has no interest in the business, or who has radically different ideas about what the business should be, could undermine operations and turn away loyal customers. A better solution would be to elevate a talented employee to leadership, while giving an ownership stake to relatives.
- Transferring shares without designating a leader — Small business owners who have several children might transfer the business through their will or by a trust, giving their children equal shares. This sets the stage for squabbles over who should run the business.
- Keeping succession plans secret — Too often, family members don’t know what a business owner plans to do with a company until the moment is upon them. Suddenly, an heir or other named successor is put in charge of a business he or she knows little about. This type of transition is also unsettling for employees, suppliers and customers.
Owners of closely held companies should have a business succession plan in addition to their estate plan. Our business law attorneys work with our estate planners to offer solutions for small business owners.
Contact Pullin, Fowler, Flanagan, Brown & Poe to discuss business succession
Pullin, Fowler, Flanagan, Brown & Poe helps West Virginia businesses develop succession plans. Call us at 304-344-0100 or contact us online to learn more.