When the time comes to let go of your business, you may have many concerns. Who should take over? How will daily operations change? Should you sell the business outright or allow a family member to continue in your footsteps? These questions can plague any business owner, and you may worry that you will still not have solidified the answers when the time comes for you to retire or in the event of your untimely demise.
Fortunately, a business succession plan can help you address any concerns you have regarding the future of your business. If you hope that your company will continue to thrive even after you are no longer a part of it, you may wish to consider your succession planning options and decide what to address in the plan.
- Buy-sell agreements: If you share ownership responsibilities for your company, your co-owners may have the ability to smoothly take over once you are gone. Creating a buy-sell agreement can ensure that your interests in the company pass directly to the surviving co-owners after a death. This arrangement could help prevent surviving family members who may have no interest in the company from suddenly becoming owners.
- Transfer of ownership and management: A major part of your business succession plan should focus on who will take over as owner and how management personnel and procedures may change. Luckily, by planning ahead, you can take the time to ensure that your desired managerial candidates can get the proper training under your supervision. You can delegate tasks with more responsibility to individuals who may one day take over and see how they handle those duties.
- When it comes to transferring ownership, you may have several aspects to consider. A buy-sell agreement may simplify this process, but if you do not have co-owners, you may need to think about who may become the new owner. Hopefully, you will have made this decision in enough time to keep the best interests of the company and your family in mind.
- Probate: If the succession takes place after your death, you may wish to remember that your business interests will likely have to go through probate. If you hope to avoid this step, you can take the time to use your business succession plan and your estate plan to work toward eliminating this part of the legal process.
Learn about your options as a business owner, and start planning today.