Whatever the future plans are for your business, every succession plan must comply with the Internal Revenue Service (IRS) tax code. Entrepreneur.com says getting a business valuation is a good starting point, as it will give you an idea of how the IRS values your company. From there, you can start to determine the potential tax liability of selling or transferring ownership of your business.

It's a good idea to work with a tax professional and attorney so that you understand the exemptions, exclusions and deductions that may affect the financial impact of the business transition. For example, if a family member is taking over the business, the Small Business Administration notes that your successor may be responsible for estate and gift taxes. Or, if you sell your company, Entrepreneur.com notes you may have to pay a capital gains tax — a federal tax on the profits you receive from selling an asset, such as a business or stock shares, says The Balance.

Whether you're just getting your business off the ground or you're looking to retire, having a succession plan in place is important for small businesses. Having these plans laid out can help your business move through changes and increase the likelihood that your business will continue to succeed for years to come.