Small Business Owners: Do You Know Who Will Take Over When You Retire?

Small businesses are the economic backbone of Kansas, representing 99% of all businesses and employing almost half of our state’s private workforce.

And although most entrepreneurs look forward to retirement, most aren’t sure who’ll take over the business once they do. Will it be handed down to a family member? Will someone buy it? Will it close?

A recent Gallup poll also discovered that many entrepreneurs felt that their business was too “small” to be carried on by someone else.

But regardless of size, your company represents more than just income; it’s a reflection of the massive investment of time, energy, resources, and personal sacrifice you made over the years…. And so much more. 

Why Do Small Businesses in Western Kansas Need a Succession Plan?

In rural areas like those throughout Western Kansas, small businesses often become the cornerstone of the communities they serve, bringing jobs to the area and supporting the local economy to ensure better schools, services, and improved infrastructure.

Succession planning not only preserves and honors that legacy, but it also can be an essential step for generational wealth building, ensuring financial stability for your family or the next owner, as well as your employees.

How Can I Learn More About Succession Planning for My Small Business?

Western Kansas Rural Economic Development Alliance is committed to working together for the common good of Western Kansas.

That includes assisting our small business owners with succession planning in a variety of ways:

• Connecting you with legal and financial advisors who can offer tailored, expert-led guidance every step of the way
• Identifying seminars and workshops that help remove the complexity of issues related to tax laws and timeline requirements
• Providing you with access to simplified toolkits to help you streamline and simplify your transition
• Helping you find a prospective buyer for your business if you have no family member who is able or willing to take over once you retire

The Kansas Small Business Development Center (SBDC) also offers confidential, one-on-one advising to any entrepreneur interested in selling their business, whether to an internal or external buyer.

Another great resource is this article, Succession Planning Doesn't Need to Be Drastic: Take a Step-by-Step Approach Instead, which offers real life examples of how succession planning can be put into action. 

Common Mistakes Business Owners Make When Transitioning Out

Putting together a succession plan also helps ensure a smooth and stress-free transition, whether that involves a family member taking over or selling it to an employee or other interested individual.

It also helps business owners avoid some of the common pitfalls that arise when the time for a transition comes. According to a collaborative report between the SBDC and Fort Hays State University, these include:  

• Underestimating how much money it will take to meet a well-earned retirement or post-business lifestyle
• Overestimating the value of the business
• Overestimating how much a potential buyer may value the business 
• Lack of proper financial records or incomplete records

It’s Never Too Late To Start Thinking About a Succession Plan 

WKREDA is here to assist our talented entrepreneurs take the next step towards retirement or the sale of their business.

Contact us today to discover more about how we can help you develop a succession plan for your small business.