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Arizona Estate Planning Attorney Giving You the Representation You Need for Early Succession Planning
Running a successful business should be a lifelong endeavor. Rather than achieve brief prosperity or plateau at a certain level, every business founder and owner should constantly strive for advancement. The best case scenario for a business owner is that their company continues to grow after they have retired or passed away. This not only ensures a powerful corporate legacy but ongoing financial stability for heirs.
In order for a business to continue succeeding, a stable succession plan must be in place. This will ensure that, in the event you are no longer able or willing to continue business operations, a clear plan is in place to pass along corporate responsibilities.
What is Succession Planning in Arizona?
Succession planning is an official business strategy that passes along corporate power to an individual or individuals in the event a CEO or other leader retires, dies, quits, or is otherwise no longer able or willing to fulfill his or her responsibilities. A succession plan ensures a smooth transfer of power and thus the ongoing operations of the business without interruption or cessation. Succession planning can be broken down into a variety of categories:
- Long Term Succession Planning
- Short Term Succession Planning
- Contingency/Emergency Succession Planning
Long term succession planning establishes what will happen to particular leadership roles in the event someone dies, retires, or quits the company. It is intended to permanently transfer power to another individual or individual.
Short term succession planning establishes what happens if someone in a leadership position is temporarily unable to fulfill his or her role. This could be due to an illness, injury, death of a family member, or other event that briefly interrupts business operations. Short term succession planning is undertaken with the idea the person being replaced will return to his or her role one day.
Contingency or emergency succession planning lays out what will happen in the event of an unexpected death or incapacitation of a leader in the company. Contingency succession planning differs from long term succession planning. This is because long term succession planning allows for the training and preparation of an individual or individuals to step into a leadership position.
Contingency succession planning should identify a person or persons who already possess the skills and knowledge necessary to step into the role. Contingency succession planning can also name a person or persons to act as temporary stewards of the role until someone else can be trained, prepared, or hired to fill the vacant role.
Why is Succession Planning Important in Arizona?
Life is unpredictable. Whether we like to admit it or not, illness, injury, death, family emergencies, and any other number of unexpected events can impact anyone at any time. This includes CEOs and those who fill important roles in a corporate structure. In the event a key figure in a business organization is no longer able or willing to fulfill his or her duties, there must be a plan in place for the smooth transition of power. This will ensure business continues without an interruption to daily operations. Having a clear plan of succession in place can also serve multiple benefits:
- Employees and Investors Will be Confident in the Company’s Future
- Management Will Know the Company Will Continue to Function Regardless of Circumstances
- Management Will Identify Potential Candidates for Succession
- Employees Know there is Opportunity for Advancement
Knowing there is a plan of succession means management can keep a lookout for potential candidates. These employees can be trained and prepared to enter the line of succession or be named direct candidates for succession. This instills confidence in employees and investors that the company will continue to function regardless of whatever circumstances may arise. It also allows employees to feel they have a potential stake in the company, which can increase productivity and dedication. This can result in an overall improvement to morale and corporate culture. For publicly traded companies, knowing a plan of succession is in place can also instill investor confidence in the business’ future.
Why is Early Succession Planning Important?
No matter how old or young someone is, unforeseen circumstances arise all the time. Anyone can get sick, die, or face an emergency with no advance notice. Having an early plan of succession place ensures business can continue as usual regardless of your age, life circumstances, or future plans.
Some people may not want to think about negative life circumstances occurring and put off succession planning. Under these circumstances, an unexpected emergency could have a major negative impact on the company. If you are young and healthy but get into an accident, are diagnosed with an unexpected illness, or if you’re forced to take time away to deal with a family emergency, the company could be unprepared for your absence. This could have multiple negative effects.
Without a plan of succession, replacing a key member in a business can take time. During this period, the company’s operations could potentially slow or even come to a halt. This could severely impact overall productivity. It could even irreparably damage the company’s reputation and/or future. This is why, regardless of your age or company’s current financial situation, it’s never too soon to have a plan of succession in place.
What Should I Do to Plan Succession?
Planning for the future doesn’t mean something bad will happen. It only prepares you and your company if unforeseen circumstances arise. A succession plan is no different than buying car or homeowner’s insurance. It’s simply another form of protection.
If you or a loved one want or need to plan early succession, don’t hesitate to contact AVID Esq. Group, LLC, located at 4365 E. Pecos Rd., Ste. 121 Gilbert, AZ 85295. We’re half-a-mile Southeast of Higley High School and three miles Southwest of Phoenix-Mesa Gateway Airport. We provide each and every person a comprehensive plan for themselves and their business with flat-fees and all-inclusive packages with zero upcharge or hidden fees. We want every business to know they can keep coming back to us for all of their needs, and pride ourselves on building personal relationships with all our clients.
Preparing for the future is just planning ahead. If you or a loved one are considering planning early succession for your business, contact AVID Esq. Group, LLC at 480-467-5636 or email us for a free consultation. Your business’ future and your peace of mind are only a phone call or email away.
