Business Succession Planning is not Just a Fancy Term

It can mean the life or death of your business.

Let’s say you’re an entrepreneur who has created a successful business, one that clearly bears your image. But have you considered what would happen to that business if you were not there tomorrow, next month, next year or in five years? Despite careful planning we may be able to control our retirement, but death, divorce or disability have a way of fouling our plans. And, what happens if your business partner dies, gets divorced, becomes disabled or decides to retire before you do?

Any business has one of the following seven succession alternatives:

• Sale to another company

• Management buyout

• Sale or transition the business to next generation of family members

• Sale of the business to all employees through an employee stock ownership plan (ESOP)

• Initial public offering

• Fire Sale or Liquidation

• Drive your business into the ground, probably you with it

That’s it! There are no other magic solutions, and bear in mind there are tax implications for each of these alternatives. Advance planning can reduce the tax bite significantly. You should discuss your plans with experienced professional counsel.

For a list of questions to ask yourself or your clients to determine the need for a business succession plan contact Jeffrey M. Manley at: jmanley@maypotenza.com or at 602.252.1900.