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In the business world, planning ahead is crucial for the survival of any business. And an essential part of that is planning for the transfer of a business when the owner is no longer around, also known as succession planning.

Implementing a succession plan is essential, especially for a family business, according to Debby Stern, Partner and CA at Soberman LLP. Often the business founder’s entire life is the business that was built, and the owner doesn’t ever want to let go of that. “They don’t talk about when I die, it’s if I die,” says Stern.

Succession planning is an important process. And it is especially complicated if the business is family-owned. “The planning is not going to happen overnight. It takes three to five years so they have to start planning in advance,” says Stern.

The owner needs to determine who the next company leader will be. It’s integral to choose someone who is competent and qualified. In some cases, the parent will choose their child, but their son or daughter may be inexperienced, or lacking the right education to run the business.

Stern advises that if the next generation is to take over, they should have at least five years experience outside the company, after which they will come back to the company with the appropriate knowledge. If a child is coming right out of school to take over, it’s more often than not too early.

Next, the company leader should decide on when he or she will step down. Stern says it’s crucial for the owner to make the announcement regarding who the next leader will be. “I’m dealing with this family right now, and the father doesn’t want to let go, and all the employees are nervous about what’s going to happen. They are contemplating leaving the business because they are uncertain.” She says the owner needs to make that announcement as soon as he knows.

“It’s a very unsettling time. When someone is in their 60s, you don’t know what they’re going to do with that business. I often have a fire drill, where I ask, confidentially, what they think will happen with the business if the owner gets hit by a bus tomorrow.” It sounds pretty morbid, but discussing these concerns is a part of creating a sound succession plan. It’s counterproductive to avoid the topic because it makes you uneasy.

Understandably, there can be complicated issues among family members. Sometimes children stay in the business but they have no desire to be there. Stern has seen this before, and she says it can be a very complex process chockfull of emotion for these businesses.

In most cases, the company’s founder’s greatest wish is to leave their legacy to their children. But, when a business owner either has no heirs or the children lack the know-how, the owner would typically name another trusted person within the company as the successor – a spouse, or perhaps another senior executive in the company. Or, the owner may opt to have the company sold once they are no longer there.

Preparing for the transfer of a business does not happen overnight. And it shouldn’t be avoided. We can’t predict the future, and for the most part, we can’t predict when we will take our last breath on earth. With that in mind, the Boy Scouts have the right idea when they say, “Be prepared.”