As a business owner, your phone is constantly ringing, your lunches are almost always business-related and you likely built your company from the ground up. If you don’t have a specific plan for exiting your business, you’re in the majority. A recent study showed that 58% of business owners lacked a succession plan, and 47% of those over the age of 65 did not have a specific transition plan.

You have poured your heart, soul and money into your business, so ensuring it can thrive even after you exit is a huge undertaking. Consider these key elements to get your succession plan on the right track.

  1. Find Out What Your Business Is Worth

Nearly 70% of business owners have a good idea of their company’s worth, but it’s important to obtain an accurate number. While there are various ways to determine the value of your business, including asset-based valuation and market-based valuation, a less complicated route is to hire a certified public accountant (CPA) who can provide an appraisal of your business.

  1. Selling Versus Successor

There are many options for exiting your business. You can become a co-owner, sell your entire business to a key employee or to an outside party or pass the business down to a trusted family member. Whatever route you decide, having a plan can provide clear insight into who will run the business in your absence. It can also help avoid unnecessary headaches and guessing games in the event of an unexpected illness or passing.

  1. Enlist Help

Putting together a succession plan can sound daunting. As business owners, we tend to try to do it all. When it comes to the legacy of your business, it’s OK to ask for help. In fact, because your succession plan is a legal document, hiring a professional attorney is a significant piece of a succession planning strategy. You may also need the help of an insurance agent, a wealth manager and key team members or advisory board members.

  1. Tax Strategies

Having a succession plan can help offset the impact of estate taxes and other costs, and can also mitigate risks like the loss of wealth due to taxes. Using tax-advantaged strategies like a family limited partnership (FLP) or a buy-sell arrangement can provide a smooth transfer of wealth. Having a tax strategy is also beneficial if you plan to use your business for charitable giving.

  1. Reflect

It’s important to really think about your business and reflect on what’s working and what’s not working. As with most things, it’s better to be proactive instead of reactive. Don’t wait until retirement — or worse, until you’re unexpectedly forced to exit the business — to put a plan in place. Identify key employees or key positions that are vital to the success of your company. Consider the strengths and weaknesses of your business processes. Think about where you have been, where are you now and what you envision for the future.

Although 78% of business owners haven’t crafted a succession plan simply because they enjoy running their company, waiting too long to plan may prevent you from reaching your goals and could increase your risk.

This article was originally published on Forbes.com on June 5, 2019.

Charlie Massimo

Charlie Massimo

Senior Vice President, Financial Advisor

Series 3, 7, 24, 63 Securities Registrations* For three decades Charlie served at top firms Shearson Lehman, New York Life and Merrill Lynch, culminating in a role as a Senior Investment Officer at Smith Barney. In 2003, Charlie launched CJM Wealth Management, where he focused on a wide range of issues from tax and estate planning, to life insurance and the use of trusts. While Charlie works with various high-net worth families, he also has a strong concentration on serving the...Read More