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Succession Planning Essential for Long-Term Advisory Growth

Data shows many small business owners continue to work later in life, making them ripe targets for retirement advice and deep support with succession planning and wealth transitions. 

By John Manganaro | February 07, 2017
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Three in five small businesses do not have a business succession plan in place, according to Nationwide's latest Small Business Survey. 

The online survey, conducted by Harris Poll and reaching some 500 U.S. business owners with fewer than 300 employees, revealed that at almost half of those businesses without a succession plan, business owners simply believe it is not necessary (47%).

“Other reasons business owners neglect succession planning include not wanting to give up one's life work (14%), not knowing when to create a plan (11%) or who to work with (11%), not having time to develop a plan (11%) and being overwhelmed with government regulations (8%),” the poll results show. 

Kirt Walker, president and chief operations officer of Nationwide Financial, suggests there “isn't a more critical component of an operational plan than a solid business succession plan for providing seamless continuity in a time of crisis or transition.” It’s an area where advisers skilled in wealth transitions can play a big role, he adds, especially at a time when many older business owners continuing to work later in life.

“As a result they postpone succession planning until closer to their retirement,” Walker observes. “However, this delay in planning doesn't enable the business to be adequately prepared for the unexpected, such as disability or loss of a leader. There is great urgency to create a plan prior to any changes, not only to keep the business functioning and profitable, but also out of respect for the other leaders, employees and customers who depend on it.”

NEXT: Younger owners show better planning