When you reach a point that you’d like to move on in your life and leave your business behind, or if you’re simply ready to retire, then it’s time to look at your succession plans. Good succession planning makes a big difference in how your business is run once you leave.
It’s important to take steps to preserve the business that you’ve built or help build. How can you do that?
The options for passing on your business
You have several options for passing on your business. The first is to pass on ownership to the person you’d like to have there in your place. This could be your adult child who has learned the ropes of the business and who will now carry on your legacy or an employee who you believe has earned the right to become the owner of this company.
Passing on the business to a single person isn’t the only option. You may split up the ownership of the company, if you’re the sole owner, between multiple heirs or beneficiaries as well. Even if you only own part of the business, you may be able to pass on your share to one or more heirs with an agreement with the other co-owners.
If you don’t want to pass the business on to someone else, you do have the option to sell the business. For example, if you have a multi-million-dollar grooming business, a local grooming company that you were in competition with may want to purchase your facility and tools, your customer list and other parts of your business that would help them. In that scenario, you could walk away with significant compensation, and the business would merge in with theirs.
It isn’t always easy to decide what you want to do with your business, but there are many options to consider. You should look into the legal and tax implications of any plan that you think would be right for you before you talk to your heirs or potential buyers about your ideas. Doing this will help you choose the right path forward and protect your interests.