When you have an establish business, one that you have poured so much of yourself into to build up and be successful, you want to protect the future of that business. That means that when it comes time for you to retire and leave the business, you want to set that business up for continued success even after your departure. To do this, you need a business succession plan.
What is a Business Succession Plan?
A business succession plan provides an outline of how you want your business to be transferred over to someone else when you are ready to retire or in the event you are otherwise unable to continue running the business. The plan will require details regarding the logistics of the business transfer It will also outline the financial details involved in the ownership transfer. The plan should be as detailed as possible to ensure the transfer is smooth and in line with your vision for the future of your business.
Most established businesses already have the structure and procedures in place to keep things running smoothly even in the event that ownership of the business is transferred to someone else. The new owner, however, must be reliable and prepared to take the business in the direction you wish to see it go towards. That is why one of the most important aspects of a business succession plan is choosing your ideal successor. It is the first step in creating a solid business succession plan. Think about who you want to take over the business. If you want to keep the business in your family, think about which family members are best suited to take over and run a business. This may mean selecting a family member who is not closest to you, but may have the business acumen and drive that you want to see play a major role in the future of your business.
After you have chosen your successor, you will need to figure out what selling arrangement would be best. If you are co-owner of the business, you may wish to sell your shares to your fellow co-owner. In other situations, you may want to transfer ownership to a member of your family or sell the business to an employee who has played an integral role in growing and developing the business. Other times, you may wish to sell the business to someone outside of the business and outside of your family. Perhaps there is an entrepreneur looking to buy an existing business. The business succession plan will detail the selling arrangement. It will set the sale price as well as the terms of the purchase.
Estate Planning to Protect Your Business Interests
Don’t wait to make a business succession plan. While you may not need until you plan on retiring, you may want to leave the business earlier for any number of reasons that may be unplanned. A well drafted business succession plan can bring you piece of mind that your business will see continued success after you leave. At E.A. Goodman Law, LLC, we craft a detailed business succession plan that can you can feel confident about. For all of your estate planning needs, contact us today.
Posted in: Estate Planning