So You Need a Business Succession Plan – How do you begin?

Burr & Forman
Contact

[author: ]

Business Succession Planning is not a new concept. It has been around a long time. You can see examples of it throughout history -

Take for example Jesus – Jesus made plans for his followers to take over his missionary work on Earth when he commissioned the Apostles to “Go, therefore, and make disciples of all nations.”  Those same apostles then preached about Jesus and allowed his message to continue on from generation to generation.

Or how about King Henry VIII – Succession issues plagued Henry the 8th’s reign, mainly due to his complications in having a male heir. Henry’s succession plan included having the Church of England break away from the Roman Catholic Church, having marriages declared annulled, having a wife killed, and enacting laws to declare who his heirs would be.

Although tax planning can play an integral part with preparing a business succession plan, routinely there are many additional issues to address:

  • Manage risk of the business and its owners and key management
  • Provide options of ownership
  • Allow the owner to maintain the level of control that he or she wants
  • Maximize the value of the business
  • Prepare for life changing events
  • Address mortality issues with owners and key management
  • Foster relationships not only between family members but also between owners and key employees and owners and third parties (such as lenders, suppliers, and customers).

Like most things, the hardest part of preparing a business succession plan for an owner is for him or her to take the initial step in deciding to set aside the time to do it. Once that decision is made, the process will likely not be as difficult as one thinks.

The first step is for you to identify your concerns and goals. Are your goals to:

  • Maximize Income
  • Maintain a certain level of Involvement and Control
  • Maintain an Investment in the Company
  • Provide a Legacy to certain family members
  • Promote certain values

The next step is to identify the goals and concerns of others. One should ask himself or herself:

  • What does my family expect?
  • What does management expect?
  • What do other employees expect?
  • What do third parties expect? (Lenders, suppliers, customers)

Once you have identified these issues you are well on the way to completing and implementing a successful business succession plan. If you would like to discuss any of these issues with one of Burr & Forman’s Business Planning and Succession team members, feel free to give us a call.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Burr & Forman | Attorney Advertising

Written by:

Burr & Forman
Contact
more
less

Burr & Forman on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide