No matter how a small business owner would like to transfer or dispose of his or her business, it is important that he or she create a succession plan for that business. A recent article details five steps necessary to create a succession plan.
- Establish Goals and Objectives: Even if you already have a succession plan in place, it is important to review the plan to ensure that it still reflects your wishes. Consider how reasonable your goals are, and what goals your family members have concerning the business.
- Establish a decision-making process: For this step, it is important to consider what disputes may arise, and establish a system for resolving those disputes. Also, select a team of professional advisors, such as an attorney and accountant, who can assist you in creating your succession plan.
- Establish the succession plan: The succession plan should identify your preferred successor along with a contingent successor. It should also identify any roles that other family members will serve in the business.
- Create a business and owner estate plan: Importantly, consider the taxation implications to the business, as well as the owner, upon the sale or transfer of the business.
- Create a transition plan: Importantly, this will address whether you transfer the business using a gift, bequest, sale, or other method.
For expert assistance in creating a succession plan for your business, contact us at (626) 696-3145.
