Why should every business owner consider or revisit business succession planning at this time of year? The simple answer: Business succession planning protects owner and company alike. It protects all of the hard work and investment you’ve made in your business, now and in the future.
3 Key Takeaways About How Business Succession Planning Protects Owner and Company Alike:
- A succession plan is not just another corporate document. It is a safeguard of all the hard work and investment a business owner has put into their company.
- What happens if something happens to you, the business owner? What if you become unexpectedly ill, are involved in a serious accident, become incapacitated, or pass away? If there are multiple owners in your company, how will a divorce, bankruptcy, or other major life event in your life or the lives of your business partners affect the continued success and valuation of the company you’ve worked so hard to build?
- A well-designed succession plan protects continuing operations, ensures payroll is met, retains key employees and customers, and prevents the company’s value from dropping by 30% to 50% within a few months.
How does a business succession plan protect the ongoing operations of your business, as well as the interests of your spouse, heirs, and beneficiaries? The primary objective of a business succession plan is to ensure the continuation of profitable operations while reducing the likelihood of disputes within your family, as well as any partners or co-owners of the company. Business succession planning is an essential strategy for any new business or for established LLCs, corporations, or professional practices.
Most people don’t want to consider what will happen if they become incapacitated or suffer a serious illness or accident. How will the business you’ve poured your life, energy, intellect, and money into continue in your absence? If you have partners or co-owners, what happens if they are disabled, incapacitated, or pass? How will ownership and the integrity of the company be preserved if a significant event, such as a divorce or bankruptcy, occurs in the life of a business owner?
Business succession planning protects owner and company alike. A well-conceived (and implemented) business succession plan ensures the company’s ongoing viability and valuation by providing the resources and instructions necessary for a smooth transition until you are ready to return, or the next generation is truly prepared to assume management responsibilities.
Business Succession Planning Requires Integrated Business Services
The integrated legal, estate planning, tax, business advisory, and accounting professionals at Janathan L. Allen, APC, and Allen Barron, Inc. help you to establish a strong, durable business succession plan that includes instructions reflecting your wishes for protecting the company, while leveraging the unique experience and insight you have into your company’s operations.
Many small business succession plans involve a revocable trust that provides for a transition into short or long-term management, a transfer of ownership, or ultimately the sale of the company. However, the type of entity and the number of owners in the business will affect the actual structure of the succession plan.
The plan may call for hiring external professionals, promoting existing employees, or providing authority to your own spouse or heirs. Your directions ensure a successful transition plan is in place to promote existing management, key employees, or family members into positions of authority. A strong business succession plan helps ensure continued success for your company and the continuation of income, distributions, or proceeds your spouse and survivors may require. Your business succession plan should establish explicit provisions and instructions to guide your spouse or family through the transition, anticipate any conflicts that might arise, and provide a path to resolve them.
Without an integrated business service provider like Allen Barron Inc., one would need to work with an estate planning attorney, financial planner, accountant, tax attorney, insurance expert, and other professionals to complete your plan. Allen Barron, Inc. and Janathan L. Allen, APC, integrate these disciplines into a single source, providing a smoother, more cost-effective solution.
Business succession planning protects owner and company alike. It protects all of the hard work and investment you’ve made in your business, now and in the future. It provides essential insurance, protection, and guidance to ensure your spouse’s, heirs’, and beneficiaries’ needs are met. It ensures your company can leverage key employees, customers, and important resources to make sure the value of all you have worked so hard to build doesn’t plummet but is preserved for the transition ahead.
Our integrated business, legal, tax, and accounting experts have decades of experience to guide you through the process. We invite you to learn more about the integrated tax, legal, accounting, and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
Business succession planning protects owner and company alike. Learn about the strategies that will protect the company you’ve worked so hard to build, while providing for those you care about most.
