Glossary · Reading the business
Succession plan
In short
This is a plan for how leadership and key roles will be transferred when the current owner leaves. For buyers, it shows how smoothly the business can continue without the seller.
What it means in a deal
A strong succession plan, or lack thereof, reveals much about the business's reliance on the seller. As a buyer, you need to understand who does what and how you'll transition into or replace critical roles to ensure operational continuity.
Related terms
Common questions about Succession plan
- How can life insurance support business succession planning and estate equalization?
- How can life insurance facilitate a smooth succession plan for a family-owned business?
- Is a comprehensive business plan mandatory for an SBA 7(a) loan?
- Is a detailed business plan necessary for an SBA 7(a) loan application?
- How important is a business plan for an SBA 7(a) loan application?
- Does the SBA require me to create a formal business plan to apply?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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