How a business is owned will determine, in part, the options available for succession planning. The main types of ownership are: sole proprietorship, partnership, and corporation.

If the business is a partnership or corporation, all applicable documentation regarding the operation of the business will need to be available for review such as partnership agreements, articles of incorporation, and shareholders agreements.

Other forms of documentation that can be important include: sales and employment contracts; loan agreements; guarantees; licensing agreement; intellectual property registrations; insurance policies.

Business succession planning is a multi-discipline process involving professionals in areas such as: law, accounting, financial planning, insurance planning, and coaching. The last one is less obvious than the others but can be just as important. Change can be stressful and difficult to manage particularly where it impacts a wider group of people such as family members. Proper management of all aspect of the succession planning process will lead to better results, less stress and fewer chances of an expensive legal challenge later.

Probably the most important skill required to do business succession planning is patience. Any planning done too quickly runs the risk of leading to less than ideal results and potential conflict between affected persons. This is just as true, if not more, for business succession planning particularly if it is a family business.

The best way to view business succession planning is as a process that begins the day you start your business rather than treating it as a transaction to be completed when you are ready to exit. Approached this way, many key pieces will already be in place which will help maximize the value of the business and protect it from unexpected events like a sudden illness or death, or the departure of a key employee. It will also lessen the stress of trying to coordinate everything in a relatively short amount of time.

How long should you allow for succession planning assuming that you have not done much or any to date? Realistically, it can take up to two years to get all the pieces together and agree about what to do. Then it can take several months or even another couple of years to implement everything. Therefore, a good range is two to five years for a business owner to get everything sorted and be in a position to exit either permanently or at least turn over control.