Financial advisers often encourage clients to take time for estate planning, and if you’re a business owner, the same type of advice applies to you. Estate planning is about getting your affairs in order so you can pass on assets to heirs and ensure your legacy is treated according to your wishes when possible. Business succession planning is about passing your company on to others and setting to foundation so your brand and business vision is kept intact.
One first reason for business succession planning is that you need to know early on who might take over for you. While some people wait until later in life to make such a decision, putting it off means you miss out on valuable time when you could be passing on values and training your replacement. While you can always pass the reins to someone who is already accomplished and experienced, if you cultivate your own replacement over the years, it’s more likely your personal values will be carried forward.
Business succession planning also gives you an exit strategy. While your company might be a big part of your life, you might not want to be involved daily forever. If you haven’t planned ahead, you might reach retirement age and realize that you’re still responsible for many employees and business processes with no end in site that doesn’t put jobs or your name at risk.
Finally, business succession planning lets you protect your family. Whether you have an heir ready to take over or you are turning management over to someone outside the family, planning ahead gives you time to leverage stock options, trusts and other vehicles to ensure your heirs can benefit financially from the business in the future.
Our firm works with business owners of all types on business succession planning. We can help you understand all your options and make educated decisions about the future of your company.