When confronted with what to do for business succession planning, a business owner might consider multiple options including passing the business on to other family members, selling the business to stakeholders currently working in the business or even selling the business to an outside individual. Scenarios such as sudden disability or death of a business owner can present serious challenges for a sole practitioner.
Despite these potential challenges, the reality is that too little succession planning is done. Less than one third of businesses actually pass to the next generation and less than 30% of those go on to pass to the third generation. If no grooming of a successor has happened yet, selling the business may be the best choice. This involves careful analysis of the uniqueness of the company, the local market, and potential profitability.
Working with a business broker can help to better understand how to set a realistic selling price and legal advisors can counsel about all possible options. Remember that planning for your business succession now can help to reduce legal challenges and concerns in the future.