While many business owners hope to keep the company in the family, it doesn’t always fall out that way. Make sure you know your family member’s intentions before approaching the planning process. Knowing your intentions and the goals of your heirs can be extremely helpful for telling you what you need to consider in a succession plan. These four tips will help guide your choices if you and your heirs do plan to keep the business in the family.
Step 1: Establish the Goals and the Process
As the business owner, you need to gauge family member interest in continuing to stay involved as well as current and future goals for the company. Once you know where various members stand, create your plan. Include governance process guidelines and dispute resolution methods in a written document. Once finished, be sure that the succession plan is communicated to stakeholders.
Step 2: Identify Key People
Determine the individuals who will be the owners and managers in the company when you are gone. It’s also important to consider which family members will have authority and whether other family members will be “non-acting” parties.
Step 3: Evaluate Business Owner Estate Planning Needs
Discuss with your estate planning specialist what implications will occur when the business is transferred over to family members. What steps can you take to minimize delays of stock to spouses? Does your buy/sell agreement clearly specify next steps?
Step 4: Delve Into Transition Details
Will the business be gifted or bequested to family members, or will it be available for an outright purchase? For purchasing, make sure that payment options are outlined clearly and that financing options, if necessary, have been provided.
Taking care of the family business requires thoughtful consideration and planning. For more help on a smooth transition, contact our offices at email@example.com.