Do you own a business?
Yes? Have you considered what will happen to the business when you retire? As you may have read in the previous blog post about Corporations, one of the most important features is that it has its very own existence. It doesn't necessarily have to be tied to the life span of one or two people. It can live on for tens or even hundreds of years. In order for a Corporation, or any business, to outlive its founder(s), planning must take place.
Do you have a partner, or multiple partners in your business?
Maybe you are planning to make your son or daughter a partner in your business? What would it be like to be in business with your business partners spouse? Even scarier, if you business partner doesn't have a spouse, what would it be like to be in business with your former business partners heirs or estate? If you aren't or weren't careful, you just might end up working with them!
What should I do?
These are a variety of important considerations not only for succession planning, but also in the formation and organization of your company. The sad truth is, most people don't ask these questions because the answers can sometimes be confusing or difficult. In reality, a bit of discomfort now has the potential to save a migraine sized headache later in life, if not for you, than for your family, friends, business partners and customers.
Do it now!
The best way to succession plan for a business is to do it while you are still living. By "living" I mean healthy, hearty and clear minded. That may seem obvious, but some people don't consider it until they reach a point where they can no longer work, come down with a serious illness, or reach some other fork in the road of life. If you wait until that major life event forces you to act, you won't be in the best position to make informed decisions. The best way to plan is in a time of relative normalcy.
You are always hard at work building your business, and you should be! However, take the time to answer the hard questions now, and set up contingency plans for the future. While attorneys and accountants will certainly be able to help, you will more than likely also involve your favorite insurance broker, and maybe even some relatives and friends. Truth be told, there are virtually endless ways to succession plan for a business. That is why it is imperative you start today!
The First Step: Talk about it
The goal of this blog post is to start a conversation. It may be a thought process at first, but involve others along the way. Talk with your partners, spouse, children and other family members. Talk with your accountant, tax preparer, banker, etc. You will more than likely find that in discussing it, your plan will slowly change. If your plan seems particularly complicated, you may need to proceed to step 2 quickly.
Step 2: Consult an attorney
Whether you are forming a new business, or trying to succession plan for an existing one, find an attorney that can help coach you through the process. In general, if you've never had to deal with an attorney before, the very thought of talking with one can be troublesome. The good news is, that many attorneys will offer a free consultation! You can speak with 2 or 3 different attorneys and decide which one fits your needs and personality best. Your attorney will help you by asking more questions and educating you on some options you may not have considered. At the end of the day, your attorney will help keep you on the right side of the law, and make sure that what you are planning for in your mind comes to fruition in reality.
Step 3: Enjoy Life!
Once your planning is in place, you won't have to worry any more. You can work hard to grow your business realizing that when it is time for you to step away, you have an action plan in place. What seemed stressful and agonizing just to ponder before is now the source of a renewed confidence. With that extra spring in your step, you are sure to achieve even greater success than you thought possible!
Do you have more questions?
If you have questions about this blog post, or about any other post, please feel free to contact us! We would love to spend some time discussing your various questions, comments, or concerns.