It is worth taking a short break from developing your product to consider what would happen to your startup if the owner—or one of the owners—left the business. It doesn’t have to mean closing down.
Here is a quick agenda for a succession planning meeting:
- Make sure the owner picks and commits to train a successor;
- Make sure the owner’s will passes on the business;
- If necessary, use a buy-sell agreement to pass on the owner’s interest; and
- Fund the transition costs with a life insurance policy on the owner.
Start by sketching out what you want to happen, then set action items and follow through with your lawyer. A bit of thinking ahead will make sure that any transition goes as smoothly as possible.
(photo: http://flic.kr/p/gFY3A)
