Succession planning is the strategy for passing on the ownership of a business after a company’s key people move on, retire or pass away. Succession planning involves the coaching and development of prospective successors to take up top positions in an organization. Family-run businesses in particular should properly plan for the succession of the business.

There are several different strategies and options for succession planning. For example, a succession plan, through cross-purchase agreements or entity-purchase agreements, can ensure an agreeable price for a partner’s share of the business, thereby eliminating the need for valuation upon death, can insure the partner’s interest to prevent the need to sell the business or other assets to cover the cost of said interest, and can result in a timely settlement of a deceased partner’s estate.

Most succession plans involve examining employees who exhibit the right leadership skills, developing a formal training program to ensure your successor has experience in the critical functions of the business, and setting a timetable to determine how ownership and control are shifted to your successor. A skilled small business attorney can guide you through the process and help you determine the specific needs of your succession plan.