Plan ahead: Extra work now might save headaches in the future
Eventually every business owner will leave the business that he or she created … either by selling the business or as a result of death, disability or retirement.
As a result, business continuation planning is about taking control of something that is inevitable.
The first step in business continuation planning is to clearly define your goals.
- What do I want for my future? Do I want to work indefinitely, or do I want a clearly defined exit strategy?
- What do I want for my family? Do I want my business to remain in the family? What steps have I taken to secure my family’s financial well-being in the event something happens to me?
- What do I want for my business? What would happen to my business if I died or became disabled?
- Do I want my business to survive my death, disability or retirement?
In answering these questions, you have three options to evaluate: retain the business in your family; sell the business to co-owners, employees or to outsiders; or, as a last alternative, liquidate the business.
Without advance planning, others could end up in control of that process. With advance planning, a business owner has the opportunity to realize the maximum value of the business, develop an appropriate tax strategy, leave the business in the hands of the owner’s chosen successors and avoid the family and business turmoil that can result from a lack of planning.