Business succession planning is always a complicated process, but it can be made that much more difficult when you have family members involved. Thinking that you want to pass down the family business to someone else, like a child or grandchild, is a common conclusion for plenty of business owners, but this does not necessarily mean that this will be the way that the transfer happens.
In the coming years, between 4 and 7 million businesses will potentially go up for sale as Baby Boomers retire or pass on their company. The biggest reasons for business sales across 2012 and 2013, in a Pepperdine University study, was due to owner retirement. The discussion around succession planning is that much more complicated for families because it includes consideration of issues such as death, inheritance, money, and personal choice.
Never assume anything when going into the process for business succession planning in California. You will want to talk to your key stakeholders including any family members that you intend to take over the business, so they clearly understand your intentions. Never pick a business value to sell the company based on your retirement needs.
An accurate business appraisal considers where your company is at in the marketplace and the possible value that it could fetch if you were to sell it to an outsider.
Make sure that you have experienced professionals to guide you through the process of selling your business because negotiations can easily breakdown and set you back to square one. Having an accountant and other financial professionals review the books of the business gives you the best possible opportunity to be prepared and avoid potential fallout.