Do you have a succession plan set up for your business? Not many companies do. However, it’s a crucial part of the business strategy for every company. It ensures that whether you want to retire, close down, sell or transfer your business, a proper plan is in place to ensure that your business can carry on or be sold for the highest amount. Succession planning can also help to avoid significant business disruptions or closure following an unexpected disaster. Learn more about why succession planning is key for your business.
Provides An Exit Strategy
When you’re running a business, you’re often focused on growing it and less on exiting it. In fact, most people avoid drafting an exit strategy until they’re in the process of doing it, which can lead to stress and disruption. You can save yourself a lot of money by creating a succession plan that plots out when you will exit your business, how much control you want to maintain, and how much profit you can expect.
Ensures Qualified People Inherit Your Business
Part of a succession plan involves deciding who will take over for you when you leave. This is something that should be carefully considered as you’ll want to make sure that you pass your business off to the right person and not just someone who is interested or is an unqualified family member. A well thought out succession plan will ensure that your life’s work falls into the proper hands and addresses any inheritance issues that could arise.
Protects Your Business In A Disaster
As a business owner, you need to be ready for anything – cyber threats, theft, natural disasters, fire and so forth. But you also need to be prepared in the off chance that a major shareholder exits or a critical employee passes away. It’s impossible to know what will happen in the future but you can be prepared for it with a succession plan. This will ensure that your business can continue to operate smoothly following a disaster, and that confidential information is passed on to the right person.
Avoids Tax Implications
Selling and transferring your business can result in surprise tax implications. That is unless you have a proper plan in place. For instance, if you plan to sell your shares instead of assets, you could take advantage of captain gains exemptions to offset part of the tax. If you plan to transfer to a successor, you could use a number of strategies like an estate freeze to minimize your future tax implications. But if you don’t plan in advance, you’ll likely miss out on all the tax-saving options that are available to you.
Alleviates Investor Concerns
If your CEO decides to leave, your investors could get nervous and decide to pull out their money. A succession plan can help ease their concerns and show them that your company is prepared and is fully committed to ongoing success.
Get a succession plan started for your business today. At the Beacon Group of Assante Wealth Management, we’ll ensure the process goes smoothly during a sale or transfer of your business. We’ll create the best tax, compensation and succession plan that is tailored specifically to your needs and safeguards your wealth and legacy. Contact us today to learn more.