The Importance of Business Succession Planning
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Business succession planning is necessary to ensure a smooth transition when you choose to sell your company or are no longer able to run it. Below, we’ll help you learn how to decide who will take over your business, how business succession should occur for a smooth transition, and more.
Who Will Take Over Your Business?
One of the first questions that needs to be considered when thinking about your business succession plan is who is going to take over your business. For some business owners, it might be a child who has been working in the business and is ready and willing to step in at any time. Others may have a key employee with years of service who has expressed an interest in taking over.
In any case, finding the right person is an important decision. It can mean the difference between financial security and financial hardship for you, your family, and your employees if your successor is not able to keep the business operating successfully.
When and How Will Your Business Succession Occur?
Once you have identified who you would like to take over your business, the next step is to figure out the details — the when and the how of your transition plan. There are basically two ways ownership of a business can be transferred: By sale or by a gift/inheritance.
The best option for your business — whether it’s a sale, a gift, or a combination of the two — will depend on a variety of considerations and your individual circumstances.
When you are ready to put your plan in place, or review an existing plan, talk with your Federated marketing representative. They can go over the benefits and importance of succession planning and help refer you to an independent attorney.
