Business Succession Planning Proper planning can help ensure your hard work and legacy can have a generational impact.Get in touch
One of the biggest threats to a family business is not recession or competition. It is the failure to have a documented succession plan in place. Your business reflects a lifetime of hard work, and business succession planning ensures your legacy continues long past a sale, retirement of a key individual, death or disability.
By determining your desired strategic direction, Cadence Asset Management and Trust can assist with funding options or establish business disruption insurance, key person insurance or life insurance to fund a buy-sell agreement. It’s about analyzing your situation and putting in place the protection your business and family deserve.
It’s best to have two succession plans, one for immediate contingencies and one for the longer term.
Family Business Succession Planning
In family business succession planning, it’s important to think of the following:
- Who takes over the reins of the business?
- Will they be capable and ready for the role?
- Will there be family tensions and struggles?
- Can the business survive the uncertainty?
The succession plan should include an estate planning attorney for properly drafted wills and trusts. A corporate attorney can also assist with the business planning side and how the transition will occur.
As you can imagine, this is not simply a business plan but a family plan as well. The years of blood, sweat and tears building a successful business should not be lost. Waiting until the last minute, or not having a plan, jeopardizes many options that could have been made. A road map will outline the path to a successful transition whether unexpected or planned.
When creating a business transition plan, there are many questions to consider, including:
- Are there children who are currently active in the business operations?
- Are there key employees who play a vital role and must be retained?
- Will the business be sold or remain in the family through the estate plan?
- Should a buy-sell agreement be in place to carry out the plan?
With so many things to contemplate, this further highlights the need to have a succession plan in place, ready for action when needed.
Wherever you are in your succession planning journey, talk to our Wealth Management team today.
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