Setting up a plan to ensure your loved ones will receive ownership of your business, or at least be able to receive the monetary value of your business, after you have died is an important concern that every successful California business owner should handle. Fortunately, by creating a business succession plan, the owners of companies can organize a way for their heirs to gain appropriate ownership and control of their businesses in the event of an unexpected death.
Although a succession plan can be very helpful in this regard, however, business owners need to be careful not to commit the most common mistake. Too many people wait until it's too late.
As long as the business owner moves forward with the creation of his or her plan before an unexpected accident or death, minor delays may be fine, but they could also end in disaster for one's family members and heirs if the unthinkable actually occurs.
Business owners can take the first steps toward creating a succession plan by asking themselves the following questions right now:
- Do you plan to retire one day, or do you want your family members to simply take over when you die?
- Would you like to create a slow transfer plan that gradually gives more and more power over to a trusted family member who will eventually become the CEO?
- Is there a way that you can manage the chance of future conflicts between your different children if you plan for two or more siblings to share in business responsibilities?
- Is there anyone in your family who could successfully take over the management of your business right now, should you suddenly die?
It's time consuming to run a business, and many company owners don't have any room to breathe. They spend their days putting out fire after fire. Handling the necessary decisions to keep their businesses running smoothly and efficiently can mean that the creation of a sound business succession plan gets put off until it's too late.
If you want your family and your business to be prepared for the future, make sure you've created a business succession plan well in advance of the day you actually need it.