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The Advisor
BUSINESS SUCCESSION Guess what? You are not going to live forever. Thinking about business succession is about as popular as writing your will – but it is a big mistake not to plan early. Not doing so can cause big problems later. Failure to plan for business succession can result in huge monetary loss not to mention the loss of the business itself. Taxes can easily take 50% resulting in bills that can only be paid by selling the business. The small business owner must carefully think through the process of succession. Who to leave the business to? What to take from the business? The major succession alternatives include Selling the business (possibly to employees) Turn over the business to a family member Leave the business to a trusted employee Take the company public (IPO) The right choice is never easy and it’s a good idea to get your professional advisers involved to ensure you understand the issues involved. By planning early you will have the option of investing time in a family member and or employee(s) to ensure they have the background to continue the business. Additional training may be required. Or, you may find that you need to search for someone new. Planning early also allows you to let existing customers become comfortable with any new people they will be dealing with. Ensure that any “secret” processes or formulas are made available to those who will succeed you. If you have planned early and carefully, when it’s time you may simply step aside knowing the business will continue.
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