Business succession planning is an important part of operating a business and developing new leaders who can replace old leaders when they become sick, retire or die. To write a succession plan, the first step is to identify the ideal successor to take over the business, then determine the best selling arrangement. By making business succession arrangements early, owners help make a smooth transition and minimize any negative effects of their departure on the company. Baby boomers are the primary owners of Canadian businesses. A significant number are still lagging in family succession planning because they don’t see themselves retiring or their health failing.

Family is the primary emphasis of succession planning for many businesses. Whether you're thinking about the future management of your business, how ownership is going to be passed along, or taxes, you won't be able to help thinking about how your decisions will affect your family. Consider some key tips to have the best chance at a successful transition.

1. Begin the conversation
   Make sure that your son or daughter wants to take over the family business. Family succession can bring out underlying conflict and spill into personal lives. Get professional help, such as a financial advisor, lawyer or accountant. Family counselling may also be needed to help parents let go of their business. Your kids may have a different vision
2. Involve family members in discussions
   How will your child or children make the company grow once they take over? What do they want to achieve? Your company may go in a new direction to grow, and you may or may not agree with the decision. Your sale price should be fair market value, even if you’re selling to your child or children.
3. Do what's best for the business
   Making sure everyone has equal shares seems nice, but it may not be in the best interests of your business. It may be fairer for the successor(s) you have chosen to run the business to have a larger share of business ownership than family members not active in the business. Another alternative is to use voting and nonvoting shares so that only some of the family shareholders can make decisions on company policy. It may be best to transfer both management and ownership to your chosen successor and make other financial arrangements to benefit your other children.
4. Train your successor(s)
   How can you expect your successor to take over and run your business successfully if you haven't spent any time training him? Your succession planning will have a much better chance of success if you work with your successor(s) for a year or two before you hand over the reins. For solo entrepreneurs, sharing decision making and teaching business skills to someone else can be difficult, but it's definitely an effort that will pay big dividends for the business.
5. Succession Planning document
   Succession planning documents been reviewed by a Financial Advisor, Lawyer, or an Accountant in the last five years. (e.g. Last Will & Testament, two type of Powers of Attorney, Buy & Sell Agreements, Trust documents, Beneficiary Designations, etc.)