There are many considerations that a business owner must take when planning for the succession of their business. These considerations can weigh heavily on an owner, but are important to think through as the business succession planning process begins.
The business succession planning process encompasses five considerations. These include:
- Emotional and familial harmony, which involves maintaining the balance between family and business.
- Ownership transition, where it is necessary to determine the best candidate to run the company for the next generation.
- Management succession – who is going to actually run the company? This can be a challenging time, as the owner must emotionally detach from something they’ve worked hard to build.
- Financial and tax aspects that must be considered in order to understand the impact on the net realized value of the company.
To learn more details about the family business succession planning considerations mentioned, click on the image above to watch our video. This is the second video of our Business Succession Planning video series. See the first video, “What is Business Succession Planning?” here.
For more from Joe on family business succession planning, check out his blog post series:
Part 1: Effective Business Succession Planning: A Call to Action
Part 2: 18 Must Answer Questions for Family Owned Business
Part 3: Balancing Family Relations with Family Business
Part 4: Identifying the Business Owner's Goals - Cash Flow and Financial Planning
Part 5: Identifying the Business Owner's Goals - Taxes
Part 6: Business Succession Planning: Keeping Your Buy-Sell Agreement Relevant
Part 7: Business Succession: Who Are the Stakeholders and How Can You Satisfy Them?
Part 8: Don't Let the Failure to Communicate be Your Business Succession Plan's Downfall
