If you own a family business and are planning on retiring soon, succession planning is the first step to take before you move on to your new journey. When the family is involved it tends to complicate the process of planning for what’s ahead. That’s why our experts here at Bodine Perry have come up with ways to help with the key issues when it comes to succession planning.
What is succession planning?
Succession planning is the procedure of identifying new leaders who can step up and take over when the person in charge retires or in some cases, passes away. There are important questions that you should ask yourself, such as “What happens to the business when I’m no longer running it?” and “Will I have enough money to retire comfortably?” Keep in mind that you should be able to answer these questions by the end of the planning session.
Prepare for the future
When it comes to a family business, not everyone is at ease with discussing topics such as aging, death, and finances. Complications can arise because of the relationships and emotions but developing and implementing a well- planned, well thought-out succession plan is necessary in order for the family business to strive from one generation to the next. It’s often recommended to work with a professional to help you and your family with solving these key issues:
- Keeping it in the family
- Discussing the pros and cons of passing the business on to family or selling it to a third party.
- Figuring out who is going to run the business
- Is there someone who is qualified enough to take over? Management and ownership are not exactly the same.
- Minimizing taxes
- When you transition the family business, change in taxes can be considerable.
- Making it fair
- Map out the best way for members of the family to feel that they are getting their fair and equal share of the pie.
Where do you start?
The succession planning process can be overwhelming at first but once the issues listed above are solved, the next few steps should be a little less complicated…
- Establish Goals and Objectives
- Create a Decision-Making Process
- Create the Succession Plan
- Draft an Estate Plan for the Business and Owner
- Devise a Transition Plan
Following these steps and working with an expert in succession planning will help save you and your family money and time. The continued success of your business is the main goal.
At Bodine Perry, once we get a better understanding of how you and your family feel on all of the key issues mentioned, we can begin constructing your succession plan. Succession planning should be a top priority for any family business considering that over seven out of ten family-owned businesses tend to fail the transitional move from founder to second generation. Let our experts help to keep your business thriving. To get started with your succession planning call (855) 851-8318 or visit bodineperry.com.