Four Bad Things that Might Happen If You Fail to Set Up a Business Succession Plan
Every business in New Jersey and New York should have a comprehensive succession plan in place. Without a business succession plan, ownership disputes can erupt and threaten the stability of your company. Further, key employees may leave due to uncertainty, there may be operational disruptions, and, worse yet, heirs/co-owners might clash over control of the company. Here, our New Jersey and New York business succession planning attorney provides a more detailed overview of four very bad things that can happen if you do not set up a succession plan.
- A Dispute May Arise Between Heirs, Co-Owners, or Other Key Decision-Makers
One of the central goals of business succession planning is putting a structure in place that helps to limit the risk of disputes. Without a clear succession plan, things can quickly become chaotic. Heirs may clash over ownership, co-owners might argue over who is in charge, and critical decisions could be delayed or derailed entirely. Here is a big challenge: Emotions run high after a death or retirement, and without written guidance, people often fall back on personal agendas. A power struggle could undermine the future of the business.
- Key Personnel May Opt to Leave the Business Outright
Many companies in New Jersey and New York are only as strong as their employees. However, when leadership is uncertain, your most valuable team members may lose confidence and walk. No one wants to stay aboard a ship with no clear captain. If long-time managers, senior staff, or key salespeople do not know who they will be reporting to—or whether the business will even survive—they may jump ship to competitors. Those types of departures can weaken a business.
- There Could Be Confusion and/or Operational Disruptions
A business needs to operate smoothly and effectively even in times of change. If no one knows who is in charge, it is difficult for anything to get done. Critical decisions stall, vendors get mixed signals, and clients start to question the company’s stability. In the worst cases, even basic day-to-day operations can fall apart without clear authority and defined roles. The confusion can cause serious delays, missed opportunities, and lost revenue—at a time when consistency matters most.
- A Transition to the Future May Not Be Properly Funded
Succession takes resources—and that often means time, money, and careful financial planning. Without a strategy in place, your business could be blindsided by taxes, buyout costs, or the loss of revenue. Unfortunately, without proper funding, family members may be forced to sell assets just to cover liabilities. A smart succession plan includes funding tools like life insurance or a buy-sell agreement.
Contact Our New Jersey Business Succession Planning Lawyer Today
At Poulos LoPiccolo PC, our New Jersey business succession planning attorney provides solutions-focused guidance and support to clients. If you have any specific questions or concerns about business succession planning, please do not hesitate to contact us today for a confidential case review. We provide business succession planning services in New Jersey and New York.
