Business successionSuccession planning |  |
Have you planned for your company's future after you're
gone? Business succession planning is proving to be one of the
most neglected areas facing business owners. Some studies have
shown that only 26% of business owners have a written continuation
plan. Of owners over age 60, only half have put their plans in writing.
| Developing a succession plan |
In its most basic form, a succession plan provides a
road map for your partners, heirs and successors in the event of
your death, disability or retirement. It can also be used to
orchestrate the sale of your business. Your plan can include:
| - The distribution of business stock and other assets.
- Debt retirement schedules.
- Life & disability insurance policies.
- Buy-sell agreements between partners and heirs.
- The division of responsibilities among successors.
- Determination of the value of the business.
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Getting started |
Business succession planning is often a complicated
process involving numerous legal and tax issues as well as family
relationship matters. Consult a lawyer, accountant or financial
planner to help you evaluate your options for creating a strong plan.
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Your personal and professional goals are determining
factors. Some important questions you need to answer are:
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- Is there someone capable of running the business once
you've stepped down?
- How much control of the business do you want to maintain?
- Are there key employees you want to retain?
- Are there sufficient assets to pay the estate tax,
equalize the estate and keep the business?
- How much money do you need to reach your financial goals?
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Bottom line: If you have not considered developing a succession plan, there's no time like the present.
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