Your business supported you and your family, and when it’s time to retire, proper prior planning can enable it to also support your retirement. Successful business succession planning should begin well before you are ready to retire in order to maximize value for you and your family. More importantly, having and implementing a business succession plan can help your family and co-owners in the event of an unexpected disaster, like your death or disability.
Some of the questions to answer when considering business succession include:
- Should the business stay in the family?
- Should the transfer occur before death?
- What are/will be the tax consequences of a transfer/non-transfer?
- Who are potential buyers?
- How will an acquisition be funded?
- Is there life insurance to protect the family/business?
- When should future owners take ownership/control?
- What role for you will remain or be required?
- How will the business accommodate new owners(s)?
- How quickly can the buyer take over?
- How will employees, customers and suppliers be incentivized to stay?
- How are your personal post-retirement goals dependent on the business?
- Can and how your goals be achieved?
- What is and how to value your business?
- Is your business prepared for such a transfer?
- Who needs to know and participate in planning?
- When can you start planning and implementing the plan?
- What is the liquidation value or best case without a plan?
While business succession is important for any business, for small, closely held and family businesses it is critical to avoid the “death” of the business and its loss of value. As business focused attorneys, we can advise you on forming and implementing a business succession plan.
Please call us if you have questions or if we can help you.