Business Succession Planning — Three Reasons You Need a Business Succession Plan Now
As a business owner, you know more about your company than any other person. You founded the company and built it into the successful business that it is today. It may be difficult to imagine that you might want to give up your business one day. However, a day will come when you may want to exit the business. A day might come when you do not have a choice because of your health or other factors.
Do you have a plan for retirement? Do you have a plan for exiting your business? If not, the company you built may not survive the transition. With a business succession plan, you can continue working for as long as you desire, but also prepare your company for a smooth transition to another family member or a third party. You can also prepare to close and liquidate your company for maximum value to benefit you and your family when the time is right.
Three Reasons You Need a Business Succession Plan Right Now
1. Expect the Unexpected
You never know what might happen tomorrow. Therefore, you need a plan right now so that your company is prepared to handle any situation. The benefits of early planning include more flexibility, maximizing business value, minimizing effects of unexpected events (i.e. death of an owner), and minimizing gift taxes and estate taxes.
Early planning also allows you to choose a successor and train your successor so that he or she can step into your role seamlessly. With a trained successor, your company can continue making money and growing without delays.
2. Time to Consult Advisors
Many factors must be considered when developing a business succession plan. In addition to creating a plan for your company, you must also consider your plans for retirement. You must also consider your estate plan and your family.
By starting the process now, you have time to consult with financial advisors and estate planning attorneys. With your advisors, you can coordinate your business succession plan with your retirement plan, estate plan, and incapacitation plan. Waiting until you are close to implementing a business succession plan to develop your plan does not give your advisors as much time to analyze all data and develop strategies to compare. It also does not give you as much time to consider all your options before deciding on a plan that is right for you and your company.
3. Business Succession Planning Forces You to Think About the Future
It is necessary to focus on the here and now when operating a business. Your company needs you to focus on daily operations and the near future. However, long-term planning is also an important factor for a successful business. If you do not have long-term goals, your company can suffer. Developing a business succession plan forces you to focus on the future. It requires you to think about where you want to take your company in five, ten, or twenty years. It also forces you to answer questions that may not be on your radar when you are focused on daily operations.
A financial advisor can help you identify your long-term vision and goals for yourself, your family, and your company. After identifying your goals, you can assess your transition options and begin building a roadmap that gives you the resources you need to achieve your vision. Once you have a plan, you can implement that plan now instead of waiting for something to happen that forces you to take actions that may not necessarily be in your or your company’s best interest.
Castle Wealth Group Offers Comprehensive Financial Planning Services
The financial professionals of Castle Wealth Group are experienced in all areas of financial planning, including business succession plans, investments, tax planning, retirement planning, estate planning, and long-term care planning. Because our financial advisors have extensive experience in numerous areas of financial planning, we can help you develop a comprehensive plan that encompasses all areas of your financial life, including your business and personal finances.
Please contact our office by calling (844) 885-4200 to schedule a consultation with one of our financial advisors.
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