“Happy is the person who knows what to remember of the past, what to enjoy in the present, and what to plan for in the future.” — Arnold H. Glasow
Unless you have discovered a secret serum for immortality (and if you have, we hope you’ll share it!), at some point you will no longer be running your business. Hopefully, that change will happen at a time of your choosing– when you decide to retire or sell the business, for example. But there are no guarantees; you could also die unexpectedly or become disabled.
Would your business be dead on arrival without you? Would your team be able to carry on, or would it take several frustrating months of chaos for them to figure out how to go forward, during which time your business would die by attrition to your competitors?
And what about your family– would they be compensated for your share of the business, or would they sell off valuable equipment for pennies on the dollar to cover your business debts because they were taken advantage of by an unscrupulous business broker? Or worse, would they have to cover your business debts from their personal resources, leaving them without the means to live the way you all do now?
These aren’t random possibilities pulled out of the air for dramatic effect; they actually happened to clients we were called in to assist when it was already too late.
That’s why we are such big proponents of Succession Planning: it’s the only way to make sure worst-case scenarios like those above don’t happen to your family and your business.
A good North Carolina business succession plan contemplates all of the possibilities and answers all of the transition-related questions that could arise if anything happened to you or your business partners, including:
These are important questions. But to properly plan for the future of your business, you need to take a deeper look at the implications of your choices– for all of the people who will be affected, and for the business as a whole.
Is your successor fully prepared for the responsibility and accountability of business ownership?
Is your successor knowledgeable enough to make operational decisions in the best interest of the business?
How will operations continue, who will handle what tasks, and will everyone have all of the information they need?
How will the value of the business be determined, and how and when will you or your estate be paid for your stake?
How can you minimize the tax consequences of the transition on your successors and yourself?
What will the consequences of your choices be for you, your team, shareholders, customers and your family?
Predicting what will happen in the future is tricky– if you have no experience with what can go wrong, it’s easy to be blindsided by unexpected consequences.
This is where our experience can help. We’ve been called in to help too many businesses and families deal with the fallout from poor succession planning done by others; we’ll make sure you avoid their mistakes.
There are many financial tools you can use for succession planning. Some of the basic possibilities include:
Negotiate the terms of a buyout of or by your partners in advance
Cover overhead expenses if something happens to you
Cover the cost of a buyout if you or your partner become disabled
These options alone aren’t enough to ensure a smooth transition that meets the larger goal of creating a meaningful legacy, but they’re a start.
For business owners who want to properly plan for the future of their business, which goes far beyond just selling to the highest bidder, we offer our Succession Planning Engagement.
When you engage us to assist you with full-spectrum North Carolina Business Succession Planning, we’ll help you with every aspect of creating your legacy and ensuring a smooth transition:
• Identifying your goals
• Developing a plan that will help you achieve your goals, informed by our knowledge of the many possible unforeseen consequences your choices can have
• Identifying and researching the available options to implement your plan, from choosing a business broker to exploring other options, to finding other advisors to assist with legal, tax or other issues if needed
• Advising and informing your negotiations with those who will make your plan a reality, to make sure you’re getting a fair deal that will serve you, your business and your successors well
• Ensuring everything comes together and your plan is fully implemented, so that you know everything will go as planned when the time comes
Because we are independent and not beholden to any one institution or subset of products, we offer a wide selection of options from a variety of carriers. With more choices, we can often provide better solutions– we’ll give you all the information you need to choose the best options for your particular needs.
With over a decade of experience assisting over 50 businesses of all sizes and types with their North Carolina business succession planning needs, we know all of the questions to ask… and we’ll make sure your succession plan answers them.
We will be happy to work with your attorney, accountant and other trusted advisors to develop a plan that satisfies everyone, or we can bring in additional expertise if you need it.
You owe it to your business partners, your team, your customers and your family to create a North Carolina business succession plan that ensures a seamless transition whenever the time comes.
A well-conceived plan will make sure things are handled the way you want them to be. And it will also protect everyone from the fallout from lengthy disruptions and expensive mistakes.
If you’re ready to plan wisely for the future of your business, please contact us— we will be happy to share our best advice and recommendations to help you get your succession plan right.