If you are a business owner in the school bus industry, your business is likely the largest asset you own.

If you are like many other business owners, you probably do not have much free time to think about succession planning. However, a plan for determining the future ownership of your business is not optional.

Here are five things you should ask yourself when thinking about succession planning for your business.

1. What is succession planning?
Will your business model survive without you? If the answer is no, a succession plan will fill in the pieces to ensure it can. A succession plan is essentially an exit strategy for a business and its owner.

Ideally, your succession plan will warrant the business will survive and prosper when its current leaders are no longer in charge, whether it is due to death, illness or retirement.

2. Why is a succession plan important?
The absence of a comprehensive succession plan leaves a lot to chance. If you become disabled or are otherwise prevented from maintaining control of your business, who would take over? Will you retain income to fund your retirement? What will happen to your workforce?

At some point, you will not be in control of your business. You can spend time planning for succession now or postpone planning and wait until the choices are no longer in your control.

3. Who would you want to take over your business?
Many business owners go into succession planning without having a successor clearly established. You might assume your son will take over when you are gone, but have you discussed this with him? Will he be the best option for your business? Will it be the best option for your son?

Having a successor clearly established means more than simply identifying a successor; it is also preparing the successor to run your business and communicating your plan with them.

4. When is the right time to start thinking about succession planning?
Ideally, a business owner should start planning well in advance. A longer time period allows for more thorough analysis of all available options. It also gives you time to get comfortable with the decisions made.

5. How should I go about executing my plan?
Once you have worked with an advisor and have a plan in place, the next step is communicating to your successor or finding a buyer.

Finding a willing buyer for any business is rarely just a matter of hanging up a for-sale sign. There are many options available when it comes time to sell your company, including a sale of assets, a sale of stock, a sale to an employee stock ownership plan, a sale to employees or family members, or an acquisition. Each of these options involves complex tax and nontax issues that you should be discussing with your certified public accountant or financial advisor.

It is entirely possible to create a succession plan transferring business ownership to an eventual successor without losing control or income. However, the earlier a business owner begins transferring ownership to a successor, the likelier it is for a succession plan to be a success, both emotionally and financially.

Kim Mahanna is a certified public accountant with Smith Schafer Associates Ltd. with 35 years of experience, including working with bus company owners. For more information on this or other tax-related topics, contact the Smith Schafer transportation team at (651) 770-8414 or go to www.smithschafer.com.