Succession Planning

Most often the smooth succession of a business is a flow of events that occurs over time as opposed to an event. Like any other business practice, the handing over of a company should be carefully considered, graceful in its presentation and well executed if it is to be successful. Unfortunately, the majority of business owners neglect to plan so seamlessly for their own succession.

 

No one likes thinking about their mortality and this often leads us to procrastinate on this subject. Also some owners so closely identify with their business that they can't imagine their "baby" continuing without them. Still others think they're too busy and put off succession planning until tomorrow - but tomorrow might be too late.

You never know when serious illness, disability or death will come up and bite you. When they do, these situations themselves will provide enough of a challenge to both family and firm, so having a plan in place to help guide everyone -- a kind of insurance policy -- is essential to the continuation of a business.

Ninety percent of all entreprise is family-owned. Fully one-third of the Fortune 500 are either family-owned or family-controlled. Yet only 30% of family-run businesses thrive in their second generation, and only 15% in their third. In many cases this is because there was no orderly succession plan.

The best time to begin the process of hading over the baton -- which should indeed be a PROCESS rather than a single event -- is between the ages of 55 and 65, experts advise.

Erinvest can help you evaluate potential successors in different roles and evaluate their overall suitability. Or if you've already anointed your successor, we will help you plan the handing off of the reins.

We will help you consider the mechanics of any transfer of ownership, and help you determine the most tax effective and fair way to pass along all or part of your interest in the firm.

Or perhaps it will involve a sale of the company and we can help you there too.