So, with that in mind, here’s an important question. Do you have a succession plan?
Most solopreneurs don’t say industry sources. In addition, most entrepreneurs don’t know how much their businesses are worth, more than three quarters count on selling their businesses to fund their retirements, and more than half of them either don’t have enough life insurance or lack it altogether.
This prevalence of unpreparedness is a shame for a couple of reasons.
First, and obviously, a lack of business succession planning on your part can lead to things you’re apt to feel bad about: abandoned clients, disheartened employees, and a pile of unpaid bills.
Second, it’s not like you’re selling lace doilies on Etsy. Shutter the typical micro-business without warning and few will notice: customers will look for you, not find you, and move on. That’s not a responsible — and in some cases, it’s not a legal — option for a financial-service solopreneur.
Besides good governance and common decency, there’s another great reason to have a succession plan. It forces you to understand the real value of your practice and how to pass it on to your maximum benefit.
A succession plan, for which there are experienced consultants, forces you to consider options like selling to an outside buyer, passing on to a family member or handing off to a colleague.
There are even firms that can guide you through the process of selling your book of business so that you can have a signed agreement in place now for a transaction that may take place months, years or even decades hence — and it may be something you can revoke at any time.
But it’s vital to understand the succession-planning process isn’t only about selling the shop. It also puts in place a vital document trail that, as a minimum, consists of:
• A power of attorney