Succession Planning

As an entrepreneur, you may be engrossed in the day-to-day operations of your business and not have the time or inclination to plan for the future. However, it’s very important to consider and plan for life’s unexpected but foreseeable events.

Business succession planning

“If you don’t know where your going how will you know when you get there?” As a business owner one must consider succession planning from both a short and long-term perspective and develop a plan that meets your specific business goals.

Short-term considerations:

  • Management: How will the current management structure and business processes affect your customer outcomes?
  • Products/services: What will happen if your products, services or customer needs dramatically change?
  • Resources: What additional resources (e.g. contractors, employees, equipment, etc) will you need to meet the needs or your customers?

Long-term considerations:

  • Ownership: How will you prepare for the loss, transition or addition of owners? What requirements for new ownership are in place?
  • Valuation: How will you prepare for the increased or decreased valuation of your assets, and is there a plan for sale, gift or assignment?
  • Environment: What will happen if market conditions or the state and federal laws that govern business entities change?

The above considerations need to be taken into account in light of the tax consequences, rights and obligations of the existing and successor principles and the impact on the businesses bottom line.

Each legal entity has its own process and required documents for establishing and maintaining a succession plan. Again, we encourage you to seek the input of your professional team when evaluating these events and their consequences.

Personal succession planning

Because your business interests are your most important “personal asset”, it’s crucial that you also consider creating or reviewing your personal or family estate plan when developing the business succession plan. The objectives, goals and consequences considered in a business succession plan may also impact and affect the principal’s personal or family estate plan.

Do you need help with any operational documents? If so, contact us today to help you get started.