Choosing a successor for your organization is by no means an easy process. Even if you are not yet nearing retirement age, it is important to think about the future. Who will be around to continue operations while you are enjoying retirement?
At Diener & Associates, we offer comprehensive succession planning services to businesses who want to feel confident about the future of their company and rest easy knowing it will be capably managed.
The Basics Of Succession Planning
Succession planning is the process of identifying and helping to develop new leaders who are equipped to take over business operations once leaders leave, retire, or pass away. Through the succession planning process, business owners can help ensure that there is someone capable and prepared to fill their role.
Once a person has been chosen as a successor, there is typically an ongoing 12- to 36-month period in which the successor is trained to prepare for future responsibilities.
As this type of planning can be a challenging topic to navigate, many businesses rely on certified public accountants (CPAs) to help address these planning issues. Such issues include estate planning, business valuation, marketing, and the negotiation of buy-sell agreements. A CPA can also help businesses minimize certain expenses and achieve faster growth.
Hiring A CPA For Succession Planning
Hiring a CPA to aid your business in succession planning can result in a multitude of benefits. While a high percentage of large businesses have succession plans in place, many small- and mid-sized businesses are not as prepared.
With help from a CPA, your business succession planning team can identify strengths and weaknesses early on to help drive your business in the right direction. A CPA can also help ensure that your financial statements are organized and current, resulting in a smooth transaction for your successor.
The Succession Planning Process
The succession planning process involves a series of steps designed to facilitate growth and development in the workplace. When you use an outsourced CPA during the succession planning process, business valuation is often the first step.
Business valuation involves reviewing a company’s finances to determine its market position.
When determining value, it is important to consider variables that could affect the value of your business over time, such as rising or falling prices, expected revenue growth, perceived risks, and marketability discounts.
A CPA will also look at other areas of business during the planning process, such as tax consequences. A common mistake that business owners make during succession planning is selling a portion, or all, of the stock to their children.
This could result in negative tax consequences. An experienced CPA can assist your business in retirement and tax projections so that your successor is prepared for possible problems in the future.
Learn More About Succession Planning
Succession planning can be a highly valuable concept if done properly. If your business is interested in the planning process or you want to learn more about how a certified public accountant can help your organization, reach out to the financial experts at Diener & Associates. You can reach out to one of our experienced CPAs by phone at 703.386.7864 or by scheduling a consultation online today.