THANKS TO CZEPIAGA DALY POPE & PERRI, LLC, author of this article. (written, March 22, 2019)
*I came across this article last year and I thought I would pass it forward. I thought it was written very well and had a great message to it. Should you have any questions, give me a call. Thank you Czepiga, Daly, Pope and Perri.
Building and growing an independent family business is an accomplishment to be proud of. It takes an enormous amount of passion, ingenuity, and downright grit. Preserving and protecting your business also requires some effort, but it’s a task many business owners overlook or put off.
Business succession planning, like any kind of estate planning, is something that should be addressed with the help of a professional well in advance of the actual event. Unfortunately, the majority of family business owners are missing that window of opportunity. According to a 2016 survey from Price Waterhouse Coopers, while 69% of family businesses surveyed expected the next generation to take over the business, only 23% had invested in creating a robust and well-documented business succession plan.
It’s not difficult to understand how business owners find themselves without a succession plan. It’s a complex and time-consuming process that involves addressing hard realities and tough questions. But, it’s also a task that’s well worth the investment of time and money in the long run.
If you own a family business and have not yet developed a thorough business succession plan, you may want to consider the following list of questions. These cover just some of the issues a good plan would address. It’s really never too early to start thinking about what’s next for your business, and these questions will put you on the right path.
Who will take over when you’re gone?
- Whether you’re taking the precaution of planning in case of unexpected tragedy or simply doing due diligence in advance of a planned retirement, one of the biggest questions you need to answer is who will take the reins when you’re no longer in charge.
- If you were to become incapacitated or die unexpectedly, is there someone ready to step in to run the business?
- In such a situation, would your family or other business stakeholders have fast access to funds that would allow them to hire any necessary resources to keep the business going?
- Is your family protected against financial risk if you should pass unexpectedly?
- Do you have a detailed management succession plan that clearly defines who will take over which roles?
- If you face a temporary disability, do you have a business Power of Attorney in place to manage financial affairs related to the business?
How much control would you like to retain? Continue reading “Succession Planning: 6 Key Questions You Must Answer!”