What You Should Know About Business Succession Planning

 Posted on April 23, 2025 in Estate Planning

Business succession planning can be a sensitive subject, especially for small and family-owned companies. However, it is an essential part of being a responsible business owner. Without a formal plan, you could leave the business in jeopardy or your family with the burden of making complex legal decisions. A Bethesda, MD business succession planning attorney can help you create a plan for your business that will make you and those important to you comfortable with the company’s future. 

What Is Business Succession Planning?

A business succession plan is a strategy for what will happen to your business once you are no longer in charge. You can stipulate who will transition into ownership when you retire, leave the business, or pass away. When you have an adequate and effective plan, the company will continue to operate with little or no disruption, minimizing the costs and risks often associated with a change in ownership. This is especially important for family-owned businesses.

There are generally two types of succession plans: long-term and emergency. A long-term plan prepares for owner transfer and will often include elements of talent development, creating a strategy for moving key players into leadership positions. An emergency succession plan is more reactionary, taking immediate action when a sudden ownership change is necessary.

What Could Happen if You Do Not Have a Business Succession Plan?

The risks associated with not having a business succession plan are unique to each situation. However, some common examples include: 

• Losing skilled employees: Experienced, specialized employees are assets to businesses, and failed leadership can cause you to lose them quickly.

• Declining value: Small businesses are especially reliant on relationships nurtured over the years. Clients and customers require assurance that they will not see a change in those relationships when new leadership takes over.

• Becoming vulnerable: Ambitious competitors can often sense weakness in succession issues, leaving your company vulnerable to a potential takeover.

• Missing qualified leadership: In the rush to fill the successor position, mistakes can result in poor leadership, risking the business as a whole.

This list is not comprehensive. Many other issues can arise that could destabilize operations and risk all your hard work. 

How Can a Lawyer Help You With Your Business Succession Plan?

Having a knowledgeable attorney to walk you through the process of naming a successor eliminates the uncertainty of the future that could cause you or your loved ones grief. For example, business succession plans are typically managed as part of the Maryland probate process, ensuring that your ideas for the business remain intact even after you are gone. An experienced attorney will ensure that your plan upholds the state’s legal standards, minimizing the risk of disputes.

Schedule a Free Consultation With a Silver Spring, MD Business Succession Planning Attorney

If you want to protect your business’s future, the Potomac, MD business transfer lawyer at The Eleff Law Group can help you develop a personalized strategy for transferring ownership of your business into the right hands when the time comes. Whether you just started your business journey or have been a business owner for a long time, it is never too early or too late to plan for a successor. Call 301-857-1990 to schedule your free consultation today.