There is nobody in the world who can fully appreciate the work you have done, and the sacrifices you have made, to build your business into what it is today. Your business is not just a company, it is an extension of your soul, and the blood, sweat, and tears you have poured into it.
In your heart of hearts you know that there is nobody in the world who could run your business as well or better than you do. And yet, if you are not preparing to pass your business on to someone else, you are not serving your customers or clients as well as you could be. Succession planning is a key part of running a successful business.
Succession Planning & Estate Planning Go Hand-In-Hand
Whether you own a single-member LLC or the controlling shares of a corporation, your business succession plan and personal estate plan must be linked in order for either to work well. The key to making this work is focusing on transitions, both planned and sudden.
Looking at the Long-Term
Both your succession plan and your estate plan should address your wishes for your golden years. This is going to involve some soul-searching on your part. Ask yourself a few questions:
- Do you want to keep working until the end? Or retire and relax on a beach somewhere?
- Do you plan to sell your business as a going concern? Shut it down? Or hand it over to the next generation?
- Do you need income from the business to fund your retirement?
Once you know what you want, your succession plan and estate plan can be drafted to meet these goals. But that is just the first step. Having a stack of papers that spell out your best intentions means very little if you do not take steps toward making them a reality.
Whatever the business owner’s long-range plan includes, the first stage must involve communicating the plan to key stakeholders. The kids need to know if they should be preparing to take over the family business. If it would be better for an employee to buy the business out over time, the employees should know this is the plan so they buy into it and are incentivized to work hard to make the company grow. If the business will be sold off to the highest bidder, employees should know that too.
The Palmer & Slay team is obviously focused on the paper drafting part of succession planning, but we are happy to work with financial planners, business advisors, insurance brokers, and accountants to ensure that the succession plan can actually be implemented.
Planning for Incapacity
While everyone hopes that the vision laid out in the long-range plan comes to pass, your succession plan and estate plan must also include provisions that spring into place in case of an emergency.
Your business succession plan should specify who can step up and run the business in your absence, and give them the legal authority to do so. It should also specify what resources are available and what actions can be taken to carry the business through any related fiscal problems. Often, this is done by securing a line of credit and getting appropriate insurance policies, something our firm can assist with.
Preserving Your Wealth. Protecting Your Loved Ones.
In Mississippi, 99.3% of all businesses are small businesses, and they employ 46% of the people in our state. The work we do to protect these businesses and their owners from uncertainty and help them plan for the future is something the Palmer & Slay team is proud of.
When you are ready to draft or update your estate plan, but you are unsure how to merge it with your business succession plan, the Palmer & Slay team is here for you. Please contact us today to schedule a meeting.