Succession Planning for Business Owners
When it comes to managing the day-to-day operations of running a business, it can be all-consuming. However, it is vital that small business owners take the time needed to assess their organization’s future and in particular what happens after that hand over control of their business. For private, owner-managed, or family-owned businesses a succession plan can lay the foundation for the growth of a business, reduce taxes, and chart a course for retirement. At A.G. Campbell Advisory LLC, a wealth management firm with offices in Baltimore MD and Naples, FL we examine succession planning for business owners and the necessary steps a leader should take when approaching this subject.
Successful Succession Planning for Business Owners
Before we dive into our helpful tips, it is important to recognize why succession planning is important. Business owners need to plan ahead and have an exit strategy in mind for what happens to their business after they retire or in the event that an unfortunate circumstance comes up like a severe illness, disability or death. Without a well-executed succession plan, your family or heirs may be forced into selling your company or at the very least feel directionless when it comes to navigating a path forward. With that in mind, here are a few ways to create a solid succession plan for when you decide to manage, sell, or pass your business to a new generation of ownership.
The first step towards planning for succession requires some introspection on your goals and needs for the future. What are your needs and expectations for future income? For your future involvement in the business? Set up a meeting with stakeholders early to begin sharing your thoughts and expectations.
Engage All Stakeholders
In many cases, this will include family members: those involved in the business and those who are not. Current business partners or employees may also be critical to the discussion.
Review all of your Options
Is there a path towards passing the business to the next generation of the family? Is a business sale to a third party or to the Company employees an option? What are the financial and tax implications of any business transfer?
Prepare the Plan
Work with your successors to prepare a plan that maps out the future for the business strategically, while reconciling the needs and goals of all of the stakeholders. Succession planning is not just the process of finding the next CEO or heir to the company, but it is also touches on every issue that affects your business and personal finances, including items such as:
- Tax implications
- Business operations
- Securing your financial future
- Planning your legacy
Engage with Professionals
Outside professionals can assist with facilitating family meetings, advising on legal and tax issues and coordinating on all aspects of the succession plan to ensure it is successfully implemented. It can be complex and emotionally taxing, but it is essential to the future of your business, and your overall well-being. Speak with a professional financial advisor who can help you navigate succession planning and make sure that your interests are protected, and that your company is ready to prosper even when you are not fully involved in the business anymore.
How A.G. Campbell Advisory Can Help
A.G. Campbell Advisory, LLC is an independent investment advisory firm with offices in Baltimore, Maryland and Naples, Florida, offering individuals and institutions custom investment advice, financial planning and family office services. A.G. Campbell was founded in 2012 by veteran industry professionals to address the need for a high-quality firm where clients have access to the resources of a large firm, without the inflexibility and conflicts of interest inherent in a larger financial institution. The principal objective of A.G. Campbell is to advise our clients on how to grow and preserve their wealth for themselves and for their families. Our client’s best interests are of paramount importance and the foundation of our work.