Think About Your Options When It Comes To Succession Planning
Succession planning is a series of decisions about how your business will operate and who will take over as leaders once you leave the business. Yes, the process may bring about difficult choices, but having a sound succession plan in place will benefit everybody and allow the business to maintain success, even after you’re gone.
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However, every business owner will eventually be faced with complicated succession planning issues. It’s imperative that a proper plan is developed that not only takes into consideration the wishes of the owner, but also any person closely involved with the business. With that, the available succession planning options usually bring about various, complex issues that need to be carefully analyzed and compared with the owner’s desires to determine the best course of action.
In my opinion, these are the succession plan options every business owner should (at least) consider:
- Transferring The Business: Gifting your interest in the business might be a popular choice if you’d like to see your family members carry on the business after you’ve left the company. With this option, your legacy continues but usually results in less cash in your pocket.
- Employee Stock Ownership Plan (ESOP): An ESOP allows you to sell up to 100 percent of your business’s stock to your employees. This option might be ideal for business owners who want to see their business and workplace values live on after they leave.
- Selling To An Outside Party: When there isn’t an obvious person to choose as your successor outside of the family, you may look to sell your business to an outside party. While this option might be easier to complete for some business owners, for others others it can be stressful and can result in its own set of unique challenges.
Start Succession Planning Now
Business owners who fully understand their succession options, set a course of action to implement the plan and seek assistance to ensure the plan is being implemented as desired are sure to realize optimal results. You have a responsibility to yourself, your family and your employees to figure out the next steps to take, and the sooner you identify your course, the better.
With expert guidance, you can develop a comprehensive succession plan complete with a baseline business valuation, exit strategy alternatives and an actual strategic plan document. Having these resources available will help you maneuver through this delicate and difficult process. Email the business valuations and succession planning team at Rea & Associates to learn more about your options and get started.
By Jack Miklos (Dublin office)