“Business succession planning” sounds like a concept for multi-millionaires, but if you have worked your whole life to create and sustain a small business which is loved by your community, you may feel worried at the prospect of what will happen to the brand you’ve built up through all your hard work. As a senior business owner, your business may be a delicatessen, or a bakery, or a small appliance repair shop. You may have a beauty parlor, a day spa, a copy and printing business. You may be a plumber, an electrician … your business sustained your family and enabled you to raise your fine children. What’s in store in the future? A senior needs a plan.
The time to begin thinking about business succession and transition issues is certainly by age 60. Of course, doing it later is still better than never doing it. Here are some things you’ll want to consider: Do I have a key employee who I can groom to be the manager once I am ready to step back? What skills do I have that I need my key successor to have? Will I need this business to provide me some income after I turn over the reins? What’s my business worth and can I sell it to somebody who will keep it going? Is there cash savings in the business, a credit line, or disability insurance or life insurance, to protect the business if anything happens to me? If my children are working for the business, which of them is really suited to take over particular roles? One child may have great sales skills, another may be the innovater who can keep this business moving into the future, and another may just get the jobs done or be better at overseeing the staff. Do the children who work for the business get along with each other? Will they be able to work together to sustain the business? Have I shared my “tricks of the trade” with them? Do they know how I do it, and what makes the magic happen in gaining and keeping customers and clients?
In preparing your estate plan, you can talk to us about giving different fiduciary roles to different people. One person may be more suited to take over management of the business and another may be more suitable to deal with the estate administration. You may want one person to have Power of Attorney over the business and another have general durable power of attorney over your other matters. You may want to have an independent third party in place to handle the valuation and sale of the business should that be necessary.
Careful planning can prevent a crisis. Thinking about these issues ahead of time can pave the way to preserve and protect this important asset.
Call us for advice business succession planning … 732-382-6070