Succession planning forces a family-owned business to ask some tough questions like “What happens to the business when you’re no longer running it?” and “Will you have enough money to retire?”

Discussing succession planning can be difficult for some families because it deals with ageing, death, and finances – all topics that can be seen as taboo. However, it’s important to have this conversation sooner rather than later because a majority of family-owned businesses fail to make it through the transition from the founder to the second generation. This is usually due to estate taxes or family disagreements. By being open and honest about the future of the business, you can help ensure that your family business is one of the few that succeeds.

Creating and implementing a winning succession plan is essential to the survival of a family business from one generation to the next.

We will help you navigate these key issues:

• Are you going to pass the business on to your family or sell it to a third party? We help you navigate the advantages and disadvantages of both of these options.
• It’s important to think about who will manage your business when you’re no longer able to. Management and ownership are two different things, so you may want to transfer management to one child but ownership to all of your children, regardless of whether they’re involved in the business or not. This way, everyone will have a stake in the company’s future.
• One way to minimize the tax burden when transitioning a family business is to keep in mind that a family business is not generally a liquid asset, but taxes are typically due when ownership is transferred. This means that it’s important to have a solid plan in place for how the business will be funded during this time. One option is to take out a loan against the value of the business, which can be used to pay the taxes due. Another option is to sell some of the assets of the business to raise the necessary funds. Either way, it’s important to work with a professional who understands succession planning to ensure that the transition is done in a way that minimizes the tax burden as much as possible.
• Transferring family ownership can be a stressful process for everyone involved. We have conversations with each member of the family to ensure they feel that they are receiving an equal and fair portion of the ownership.