Developing a strong succession plan for a family-owned business can be a challenging, difficult affair. Nevertheless, it’s incredibly important, as a large amount of family-owned businesses fail to succeed when passed from one generation to the next.
In large part, that’s due to poor planning. There are a lot of factors involved in a business succession plan, from retirement plans, tax management, ownership, and management plans. Regardless of these challenges, it’s vital that you get things worked out sooner rather than later.
If you have a family-owned business and are beginning to think about your succession plans, don’t hesitate to get in touch with us today. Our team provides free consultations to help you get a better sense of the factors involved in a business succession plan, and we’re ready to take your call.
Key Factors We Will Discuss
Do you want to pass your business to your family? While keeping your business in the family might be ideal, a third-party sale might also be a viable option to seriously consider. If you’re family is not as passionate or interested in your business as you, selling can be better in the long-term for your family, especially with the serious challenges of passing a business to the next generation.
How are you going to handle your taxes? Estate taxes can take a huge bite out of your business the minute you transfer ownership, which can present a significant challenge.
Are there going to be differences between ownership and management? Sometimes there is just one family member who wants to run the business on a day-to-day basis, but you want to transfer actual ownership to more individuals in your family. We can help you get things in order to make sure there’s no confusion related to responsibilities or benefits.
How do your family members feel about the succession? Ensuring that all involved parties are on the same page for the succession plan is vital in avoiding (or at least mitigating) any problems that could arise over time. We’ll talk to your family members to make sure they’re in agreement with the overall plan and ready to move forward.
Ultimately, our succession plans involve a few key factors:
- Developing a fully documented and justified business valuation.
- Restructuring your business to accommodate the changing of the guard.
- Evaluating and managing the tax consequences of a succession.
- Projecting your retirement plans.
- Projecting your business’ tax situation after the succession.