Business Succession Planning
If you are a business owner, what will happen to your company if you die, retire, or become disabled? Start your business succession planning now.
We are often in denial that anything could ever happen to us. Many people do not want to think about their own mortality, but the reality is that we will all die someday. Many will live to retire. Some may become disabled before they reach that point. In fact, nearly 13% of Americans live with a disability and that number has grown since 2010.
If you are a business owner, now is the time to think about your business’ future. What are your future plans? Do you plan to stay in business for life and then transfer ownership to a partner or family member? Do you plan to shut down your business once you retire? How healthy is your business? Are you seeing growing profits or is your business struggling?
These are the questions you need to ask yourself now, while you are of sound body and mind. You should not wait until something happens to you and others have to make decisions for you. Accidents can happen at any time, so do not put the stress and headaches on someone else, who may not know your intentions. This is why business succession planning is important.
What is Business Succession Planning?
Business succession planning involves financial and logical decisions as to what will happen to your business and who will take it over should something happen to you. Transferring a business can happen in several ways. If you have a partner or co-owner, the logical choice would be to have them take over your side of the business. You could also sell your business to a key employee who knows the ins and outs of the business and could be easily trained to take over. Another option is to sell to a family member, such as a child who may be interested in taking over the family business.
You could also sell to someone outside the family or company. You may have entrepreneurs interested in your business. Sometimes you can sell to a different company altogether and create a merger or acquisition agreement.
Whatever you decide, you need to have a well-crafted business succession plan in place. Transitions can be frustrating for all involved, including employees, managers, co-owners, and stakeholders. Employees may think their jobs are in jeopardy. Higher-ups may believe that the business will lose revenue or go under altogether. You can alleviate these fears and concerns by creating a business succession plan. By being prepared, you will benefit not only yourself, but your family, the company and the person or company who will be taking over.
Need Help with Business Succession Planning? Contact a Texas Estate Planning Attorney
If you are a business owner, it helps to think about the future. Making a plan now will make things less stressful, and expensive, in the future when something does happen.
It is never too early to start business succession planning. Pearland estate planning attorney John Powell III understands the laws and can help you create a plan that works best for your situation. To get started, fill out the online form or call our office at (832) 850-6095.