Business successions fall into two categories: those created as result of thoughtful, careful, design and planning and those created by crisis. Successions created by crisis almost always will be less advantageous to the business owner than those resulting from thorough planning.
We view succession planning as a process requiring several steps to make it successful:
• Everyone must exit his or her business eventually, whether voluntarily or involuntarily. After recognizing this, the business owner should determine the amount of income necessary to secure his or her financial independence and determine a tentative target date for exit from the business.
• Determine the successor to your business, whether a family member, business partner, key employee, or third party.
• Determine the value of the business for the purpose of your succession plan.
• Assemble a team of advisors to assist you in developing and implementing your plan. The team should consist of a lawyer, an accountant, and a financial planning or investment advisor, and may also require the services of a business consultant and a business broker.
• Implement methods by which you may motivate key employees to help create and preserve value in your business.
• Determine the most advantageous methods for building value in your business and for transferring the business in a manner that makes the most sense under current income and estate tax provisions.
• Implement the plan using the services of your advisory team.
• Conduct regular follow-up conferences with your advisory team to make certain that your succession plan is on track, and make adjustments as necessary to take into account changes in your personal financial needs, your business, and current tax laws.
Only by careful planning, implementation, and continual monitoring can you achieve an exit plan that optimizes the value you will realize from your business and preserves it for you and your family. We have consulted with many business owners in the development of their exit plans and spearheaded the implementation. We are available to consult with you privately or to present our exit planning seminar to groups of interested business owners. Please call us to arrange an appointment for a consultation or seminar.