Imagine you’ve spent the last forty years working hard to grow a successful business that has allowed your family to live a wealthy and abundant life. However, as you’ve grown older, you’ve also grown tired of the demands required to run the business.
You’re ready to live a freer life, but you also want your children, who are now adults, to have the opportunity to run the business themselves. It may be time to develop a family business succession plan.
When developing a business succession plan, make sure to follow the following five important steps.
Talk about the plan with your family: You might have a dream for your children, or one child in particular, to take over the family business, but what if he or she doesn’t want to? Make sure your family is on board with your business success plans before you finalize your strategy.
Get professional help: To ensure your succession is lawful, appropriate and well-organized, you may want to consult with legal, accounting and business professionals who have extensive experience in these matters.
Choose your successors: You’ll want to identify who will serve which kinds of roles in terms within the business after you pass your business on to heirs.
Organize the ownership transfer: Makes sure you transfer the ownership of your business in a way that reduces the potential for tax burdens on yourself and your family members. If the business succession will not happen until after you die, take the appropriate tax and estate planning steps to transfer your business assets in the tax most efficient way.
A well-planned family business succession is a great way to preserve what you’ve created in your company so that it will continue to support future generations of your family financially. In the future, an inspired family member will improve your business and make it much more profitable in the decades ahead.