Succession Planning a Business Necessity
The last thing any business owner wants is to think that his or her family is fighting for control or money after they’re gone. A close second is that you don’t want the IRS to claim more than is necessary during a transition. Lastly, you want to see your business creation flourish and grow long after you decide to stop working. When small to mid-market business owners were surveyed, the vast majority (90% +) of them indicated that they would be willing to take the necessary steps today to ensure that a smooth business transition occurred in the future.
A well-structured succession plan can assist the business in a variety of ways. First it provides a level of transparency for key employees and/or family members that will enable them to focus on growing the business, rather than be distracted by the unknown. It also affords time so that those people that are truly dedicated to driving the business will be motivated appropriately. Next, a plan facilitates a business owner’s thinking around strategies to minimize its tax liabilities. Tax laws are complicated and take time to understand their intricacies to chart the best option for you. An effective planning process will also foster open dialogue with its employees, suppliers, and in some cases customers that can lead to solidifying the organization’s long term prospects for survival.
Although there are many elements to building a succession plan, the following highlight several of the key steps as to how:
Start the planning process early. Planning now affords you more options, especially when it comes to mitigating tax liabilities.
Be transparent and communicate. The worst thing you can do is not keep all respective stakeholders in the loop. Succession planning is a positive, it allows you the chance to take a long hard look at the business and the future.
Fit is everything. A succession plan includes making challenging decision around the future management of the business to drive its future viability. These decisions aren’t always popular or easy for many of the stakeholders to understand, but finding the best fit is critical to your long-term success.
The business need is sometimes greater. What’s best for your family is not always aligned to what’s best for your business. Be honest with yourself, evaluate the situation objectively.
Seek assistance in the areas where you lack expertise. Advisors, accountants, and/or attorneys can assist in reducing your tax obligations and avoiding possible legal challenges.
Using the services of a professional advisor can greatly improve your chances of establishing a sound succession plan tailored to reach your goals. Knowledgeable advisors can appropriately advise you on the succession planning process.
For more information or to schedule a complimentary consultation please contact BridgeLane Advisors, at email@example.com.