Succession Planning
If you own a family business, retirement isn’t simply a matter of deciding not to go into the office anymore. Planning the succession of your business can make an enormous impact on how smoothly the transition will go.
You’ve got some critical questions to answer like…
“What happens to the business when you’re no longer running it?” OR “Will you have enough money to retire?” OR “What are the benefits of succession planning?”
The family dynamic complicates the whole transition because of the relationships and emotions involved. Most people are not comfortable discussing topics such as aging, death, and financial affairs.
In light of the fact that more than seven out of ten family-owned businesses fail to survive the transition from the founder to the second generation, frequently due to estate taxes or family strife, or both, succession planning should be a top priority for any family business, whether it is complete or not.
A successful succession plan must be created and put into action if a family business is to last from one generation to the next.
We help you with these key issues:
- Keeping it in the family. Are you going to pass the business on to your family or sell it to a third party? We help you weigh the advantages and disadvantages of each of these options.
- Who’s going to run the business when you’re gone? Management and ownership are not the same. You may decide to transfer your business’s management to just one of your children but transfer equal shares of business ownership to all your children, whether they’re actively involved in the business or not.
- Minimizing the tax bite. The tax burden, when transitioning a family business can be significant. The problem is that while taxes are frequently owed when ownership is transferred, a family business is normally not a liquid asset.
Making it fair. Transferring family ownership often adds a tremendous amount of stress to individual family members. We have a conversation with every family member to make sure they all feel like they are receiving an equal and fair part of the pie.
What we do for you
After learning your thoughts on the major concerns mentioned above, we build your succession plan with a focus on the following 4 elements:
• Business Valuation.
• Business Restructuring.
• Tax Consequences.
• Retirement Projections.
Need Help? Contact Us Today!
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“What happens to the business when you’re no longer running it?” OR “Will you have enough money to retire?” OR “What are the benefits of succession planning?”
The family dynamic complicates the whole transition because of the relationships and emotions involved. Most people are not comfortable discussing topics such as aging, death, and financial affairs.
Because more than seven out of ten family-owned businesses fail to survive the transition from the founder to the second generation, frequently due to estate taxes or family strife, or both, succession planning should be a top priority for any family business, whether it is complete or not.
Protecting the family. Are you going to sell the company to a third party or pass it on to your family? We assist you in weighing the benefits and drawbacks of each of these choices.
Who will manage the company after you are gone? Ownership and management are not the same. Whether or not your children are actively involved in the business, you may choose to give just one of their administration of the company while giving each of them an equal ownership stake.
Reducing the tax burden. When a family business is transferred, there may be a large tax burden. Although taxes are frequently due when ownership is transferred, the issue is that a family business is typically not a liquid asset.