What is Business Succession Planning?
Business succession planning refers to the practice of using estate planning and other strategies to increase the chances for the survival of your family business when you retire or die unexpectedly.
According to the Family Business Institute, 88% of family business owners believe their family will control the business when they pass on. In point of fact, only about 30% of family owned businesses survive into the second generation and only 12% are viable into the third generation. In fact, the failure can be traced directly to lack of family business succession planning.
Succession planning helps you focus on developing the talents in future generations and key staff members to take over once you retire or die. It also helps you look at all the consequences of passing along the business.
There are plenty of questions to think through as you plan how to pass your business along. Here is a quick sample of some of the questions you should be thinking about.
• Do you want your family to inherit and run the business?
• Do you want to sell the business and have your family inherit the proceeds?
• Or would you prefer to have competent members of your staff take over running the business, while you family remains in advisory role?
• Do you have a buy/sell agreement? Is it well prepared?
• Do you have a management succession plan in place?
• Do you know how to give your business interests to your family, but still maintain control?
• Are you and your spouse in agreement on the ultimate disposition of the family business?
If you are interested in learning more, you can download the Business Succession Planning Checklist to see how prepared you are for the coming change.
Poulos Law Firm has helped many businesses plan for the future and we can help you think through the steps necessary to preserve your business for the next generation.
Call us today for your consultation!