Let’s get an uncomfortable thing out of the way: One day you won’t be around to run your business. Not necessarily because your loved ones will be mourning your passing—you just might be passing time under a palm tree drinking pina coladas! When you spend years building your business, it only makes sense to plan for a time when your business operates without you.
For many business owners, passing on a business is part of their family legacy. Others need to consider the livelihoods of their employees. It may not be easy think about a succession plan but you don’t have to do it all at once. Here are three steps for getting started.
- Consider what’s next for you and the business.
Give some thought to what you want to do next. Perhaps you want to stay involved in the business and slowly decrease your responsibilities. Maybe you want to sell the business.If you want to keep the business in the family, who owns it? And who will manage operations in the future? Do they want to do this? Are they prepared?
Consider what’s best for you, your family and your business.
- Talk with your family and business partners.
After you’ve identified your desires, start a conversation with trusted others who will be affected. Discuss their needs and desires as well as your own.
- Write down and share your plan.
To make transitions as smooth as possible, formalize your plan in writing. Consult with an attorney and an accountant to make sure your succession plan is workable for your particular business and minimizes tax costs.
Now that you’re thinking about succession planning, here are three more resources that will help you with the practical, tax and legal aspects of the process:
- How to Create a Business Succession Plan and Why You Should from CEOWORLD Magazine
- New Tax Act Affects Family Business Succession Planning by Steve Grimm, JD, LLM, CPA, CMA
- A Blueprint for Family Business Succession Planning from Business Law Today
As always, our business development managers can answer your questions about succession planning when it comes to banking. Give us a call at 800.991.2221 or contact us directly. We’re here to help you grow your business!
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