Business owners often think about what might happen to their company upon death, disability, or retirement, but some owners find it difficult to take the time to work through different scenarios and decide upon a workable succession plan. Generally, one of three things happen: the business continues, the business is sold as an ongoing operation, or the business is liquidated. The founders of businesses with family involved tend to want the business to continue with the next generation.
Ideally, a succession plan for a family business includes an estate plan and a business and management succession plan. Estate planning tends to be more personal and involves both the children who are and those who are not involved in the business. Other considerations include actual ownership of the business and managing the impact of estate taxes. The business and management succession plan, on the other hand, addresses control of the ownership and major decisions of the business, management of day-to-day operations, and other matters that are unique to the specific industry.
As businesses approach end-of-year planning, consider being proactive with succession planning and try to pinpoint actual succession candidates. If you find yourself concerned about the talents and abilities of the next generation, consider your options such as adding professional development efforts to next year's budget and integrating succession planning in your hiring strategies.
Change is inevitable. With effective, deliberate succession planning, your business can endure and grow through future transitions. Let Wright Beamer help you with a plan. Contact our office at firstname.lastname@example.org or (248) 477-6300.