If you're planning to pass a small business on to your children, you cannot understate how important it is to have a good succession plan. It's about more than just you or your heirs. It's also about the employees and the economy as a whole.
You could make the argument that nothing is more important to the economy than small businesses. Many experts have called them the backbone of America. Here are a few key statistics to consider:
- There are 30.2 million small businesses in the United States
- These businesses employ around 58.9 million people
- Of all the businesses in the country, small businesses make up 99.9%
- In terms of overall employees in America, these companies employ 47.5%
How is the change in ownership going to impact your workers? Are you hoping to groom one of your children to take over the business and allow it to thrive into the next generation, or would it be better to sell the company, let someone else run it and simply leave the profits from the sale to your children? If you do want to keep the company in the family, do you need to talk to your children about how they should run it, what changes they may want to make, which employees to keep and much more?
This is a time of change. It can go smoothly, and the key is proper planning. You need to consider every aspect of the transaction, all of the legal options that you have and what you and your heirs can do to make sure the business sees success for years to come.