Business Succession Planning
April 21, 2022
If you own a business (or are the co-owner of a business), your survivors will be faced with additional challenges beyond your estate should you pass away. Many small business owners keep their records “in their heads.” This makes for quite a challenge for your survivors who must identify what bills are owed, what is in your accounts receivable, and what your employees are owed for their labor. Remember, as the owner of a small business, your family may depend on the continuation of the business for income. Your employees depend on it for a paycheck. Your vendors and customers depend on it as well. Many businesses just fold with the death of the owner because there was no succession plan in place.
Succession planning for your business can begin during your lifetime with gifting interests to the next generation and training the next generation to assume the reins of the company. In some cases, the next generation of the family should simply not be running the business. Identifying key employees who would step into leadership roles and training those individuals is crucial.
There is no “one size fits all” solution to succession planning. Each business has its own challenges. Family dynamics and the abilities of the next generation are also a variable. Passing down a family-owned business to the next generation that has neither the skill sets nor the experience to manage the business will often result in failure.
If you are ready to create a business succession plan for your company, contact us online or call (412) 338-1184.