Imagine you have an incredibly successful business. You don't want your children to lose out on the success of this business, which you know could serve your family for generations to come. As such, you've decided to create a business succession plan to leave the company to your kids.
As you make the preparations for your business succession plan, you'll probably want to consult with an estate planning attorney and financial professionals. To ensure the success of your succession, consider the following eight steps carefully:
- Develop a code of conduct that will be used during family business meetings. This code must be followed to ensure that family members voice their points and work together logically and in a business-like fashion.
- Make a list of your professional advisors: attorneys, bankers, accountants and peers who do business with you.
- Get clear about your goals and expectations and design contingency plans that will address different issues that might arise.
- Identify your unknowns and knowns relating to your business, and what might be changing in the industry so you can better plan ahead for upcoming challenges.
- Work closely with your advisory team to ensure you've chosen the right business succession plan.
- Work closely with financial and tax professionals to ensure your tax and legal structures are sound. Also, make sure these structures are prepared to handle the ownership transition.
- Get everyone on the same page by communicating your plan to all parties involved -- including your professional advisors.
- Write down a step-by-step action plan, and take ownership of it as the leader of the plan.
Are you ready begin the process of designing your business succession plan? It can feel overwhelming if you've never done it before, but for an experienced estate planning and business succession lawyer, passing on a family-owned business can be a straightforward procedure.
Source: Cincinnati Business Courier, "4 ways to ensure a succession plan works and the 8 steps to success," Sep. 14, 2017