Business owners are wise to have a business succession plan. Without a plan in place, courts will consider the business an asset of the owner. As such, it would likely go through probate. A business succession plan helps avoid this public court process while also setting the business up for a more successful transition.
In addition to accounting for tangible assets within the business succession plan, entrepreneurs are also wise to ensure their plan addresses the transfer of digital assets.
Why are digital assets important? Businesses in today’s marketplace rely on digital assets. Businesses may use everything from software to help with daily operations to social media for marketing.
A failure to account for these assets within the business succession plan could slow the transition of the business. Instead of focusing on continued production and meeting clients’ needs, the new business leaders may find themselves either unable to locate the digital asset or locked out of software and searching for passwords.
How do business owners account for these assets? These assets require specific planning. First, put together an accounting of all digital assets used by the business. Include any email accounts, business website addresses and smartphone applications as well as software for payroll or accounting. Next, review the software or digital service provider agreements. Will these programs automatically transfer to a different business owner or is specific action required? If not, take appropriate action to ensure the transfer occurs when needed.
It is also wise to bring someone into the fold. If you are training a successor, begin bringing this individual up to date on the workings of these digital assets. Review how the assets are used and accessed and attempt to proactively answer any of the successor’s questions.
Finally, make it legal. Make sure the assets are specifically accounted for within the business succession planning documents. State who has access to these assets and outline the strategy for the transition. These proactive steps should help to ease the transition of ownership and better ensure the business continues successful operations in the future.