Statistics say that about 80 to 90% of U.S. businesses are family-owned. However, less than a third will survive into the second generation, with just one in ten making it to the third.
KRCU’s recent article, “Business Succession Planning is Very Important,” reminds us that business succession planning is a process in which business owners research and consider a strategy to move forward in the event of death, illness, or simply transition.
Business succession planning implements several estate planning strategies. There is no “one size fits all” plan. A business owner should carefully consider his or her options. Without a plan in place, there’s a good chance for failure.
There are several factors to be examined. There are questions like estate taxes, liquidity, ownership percentages, family disagreements and the management capabilities of those relevant individuals.
The uncertainty of a transition can impact the business internally among staff and externally with customers. As a result, it’s vitally important to create a business succession plan and communicate that plan to your team and family.
There are many succession planning vehicles and succession planning concerns. Seek the advice of an expert on these matters and do it sooner rather than later. Work with an experienced estate planning attorney, who can walk you through the issues that must be addressed.
Many experts think that business succession planning is at least as important (and maybe more important) than individual estate planning.
Your employees, customers, and family members are trusting you to create a smooth transition. Don’t disappoint them.
Reference: KRCU (June 17, 2018) “Business Succession Planning is Very Important”