When you think back to the time when your business was nothing more than a dream, it might make you smile. Fast forward a few decades that were filled a lot of hard work and unending effort, and you reach the memories where you felt satisfied that your business was a success. As you approach your Golden Years, you’ve been spending more and more time thinking about what will become of your business when you’re gone.
You obviously can’t control such matters once you pass from this earth; however, there’s a lot you can do while you’re still living life to its fullest to set the stage for a successful business succession plan. It’s not usually enough to approach your eldest son, or a sibling or daughter (or nephew, niece or even a good friend) saying you want him or her to take the reins of your company when the time comes.
While you may think your intent is perfectly clear, mentioning such matters over a quick golf game doesn’t really create the appropriate paper trail or any legally enforceable documentation needed to ensure your business gets handed down according to your plan. Instead, it’s best to put everything in writing, preferably with a witness present to notarize it all. Many people choose to incorporate their business succession plans as part of their estate plans.
Besides naming someone to obtain ownership of your business, you may also want to designate who will handle accounting, management, sales and customer service; just because one person is well-suited for one thing doesn’t mean the same person is the best choice for every duty. Also, it’s crucial to decide whether you will transfer ownership to one person only, or will divide shares among all your children or other significant parties. A paramount importance is making sure everything is clearly spelled out in your written plan; this helps prevent sibling squabbles or other disputes if one person feels he or she has been slighted.
Family discord and high taxes often cause the demise of a business before it’s successfully transferred to a new generation of owners. Hopefully, you will leave no stone unturned as prepare your business for continued success when you are no longer here to run things overseeing its operations. Through careful planning and thoughtful discussion, you may be able to ensure that your once-upon-a-time dream will be a lasting legacy.
Writer Bio: Judy Dudich
Judy Dudich resides in the beautiful woods of Pennsylvania, where 24 acres of land and a home-office provide the perfect setting for her children’s home-education and her own homesteading and business ventures. Life is full of blessings (and challenges!) for Judy, as a wife, mother of 10 and Grammy to six. She is a published author, whose book, “I Surrender/A Study Guide for Women” continues to encourage and support others in Christian family lifestyles throughout the world. Judy has also previously worked in the online speaking circuit. Her passion for permaculture, re-purposing, foraging and organic gardening fills her days with learning and adventure that she loves to share.