Business Sucession Planning

Statistically, only thirty percent of family owned businesses survive from the founding generation to the next generation. Beyond that generation the success is even worse.

The primary reason for the lack of success rests on the fact that most business owners fail to make plans, have the wrong plan or have not updated the plan. 

A comprehensive estate plan should include planning for the succession of the business. Here are some things to consider.

1.  If some children are active in the business and others are not, how do you treat everyone equally?

2.  If they business is to be sold to a third party how can the sale be structured to protect your family and loved ones?

3.  Will there be sufficient liquid cash in the estate to pay any death taxes or will the business have to be liquidated in order to raise the cash needed?

If you are concerned about the succession of your business it is very important to plan accordingly. 

Comments

[Thomas William Deans]

Andrew your comments are right on the money. Business owners simply are not planning for their business succession. Some business owners may have a will and think that they are in good shape. What they don't realize is that upon their death their stock may shift to their spouse who has no idea, interest, ability to lead the family business -- Family Business owners should formalize their succession plans and make arrangements to sell their business to someone, be it family or a third party. Controlling the clock planning the future sale of a business is tough but the mark of all extraordinary business savy owners.

[probate question]

A detailed professional appraisal is likely to be good money spend. It will help insulated the executor from liability and aid in the sale of the business.

[john]

hi,

As the author said planning is certainly the way to put things right. Without planning we can do nothing. To be successful in business we need proper planning.
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john