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Why succession plans are so important for Louisiana businesses

On Behalf of | Jan 15, 2025 | Succession/Probate

Individuals in Louisiana running small successful businesses or professional practices need to think carefully about the future. Typically, they need to engage in succession planning to help preserve the company for their loved ones or for the protection of their employees.

For people in Louisiana, the term succession planning may be confusing at first. Succession planning does not refer to making arrangements for an estate that might include a business or professional practice. Instead, it refers to a thorough plan established to better ensure that the business continues operating seamlessly when the owner dies or becomes incapacitated.

What does a succession plan include?

A solid succession plan often includes a short list of candidates who could take over the business owner’s position. The plan may also outline the training necessary to fulfill job responsibilities. Some business owners go so far as to create a detailed explanation of all of their recurring job tasks. They may include information in the succession plan not made available publicly elsewhere to ensure that their successor can readily step into their role in the time comes.

How do businesses implement a succession plan?

Making the effort to establish a succession plan is the first step in the process. It is also arguably the most important. However, succession planning often also includes working with successor candidates to train them for the possibility of a leadership role in the future.

They may engage in job shadowing or continuing education to help them acquire the skills and knowledge necessary to step into a leadership role when the time arises. Frequently, working with a primary candidate and an alternate is better than training only one person, especially in cases where a successor is an employee rather than a family member who expects to inherit the business.

Business owners typically need to ensure that the terms of their succession plan align with the information included in their estate plans. The party taking over business management does not necessarily need to be the new owner of the company, but there should be a plan in place to help everyone stepping into a position of authority work well together.

The nature of a business and other factors influence the best way to approach succession planning and estate planning. Business owners may need help identifying risk factors and planning the best path forward for their companies. Securing guidance when establishing, revising or implementing a succession plan can help protect a business from the instability that often accompanies leadership transitions.

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