Any number of major companies can illustrate the importance of business succession planning. Succession planning issues always make for interesting news subjects especially when they involved major companies like Disney, General Electric or Berkshire Hathaway. Although Disney had what they thought was a clear plan in place to replace their CEO, the individual intended to replace Bob Iger announced suddenly that he was leaving the company as well. 
It looks like from the perspective of analysts that Disney may need to extend the contract with the current CEO while they look for an appropriate successor. and of course, it comes as no shock to anyone that the company’s stock value took a drop this last week. Succession planning is just as important for smaller and family owned companies as it is for these major companies. Whether you plan to transfer your business to a family member or an outsider, it will more than likely involve some kind of formal transaction. Research shows that 34% of business owner respondents, in fact, have received a formal offer for their business but 88% of these decided not to sell saying that it simply wasn’t the right time.
Among business owners who had not yet received an offer, according to an RSM Middle Market Leadership Council survey, 22% believed that they were likely to sell in the future, raising the question about how they would transfer ownership if they did follow on this track. There are several different questions you need to think of when conducting your business succession planning. These include:
- Will you, the owner, have sufficient income or assets outside the business entity if you pass on to a family member?
- Will you be able to achieve your necessary retirement and estate planning needs if you sell to an independent buyer?
- What role would you like to play in the business after it is sold, if any?
- What after-tax proceeds do you need to count on to meet your charitable estate planning, lifestyle, and other goals?
Meeting with a New Jersey estate planning attorney can help you accomplish these goals and more. Contact us today to learn how our attorneys can help. Set up your meeting by emailing info@lawesq.net.