Over time, business owners spend a lot of blood, sweat, and tears crafting a good business plan, finding an appropriate corporate structure, and seeking the best possible financing options for their businesses. However, the one part of their businesses which is often overlooked is succession planning. Nobody is going to be able to run a business forever, so all small business owners should have a plan in place for what will happen to their company upon their death, disability, incompetence, bankruptcy, or retirement.
Having a strong and enforceable succession plan is as necessary as any other part of starting or operating a business. In fact, when you hire a corporate attorney to help you with the formation or operation of your business, you should probably develop a succession plan.
Here are a few things to keep in mind as you work on your succession plan:
Keep it flexible: If the plan can’t be modified as you learn more about the strengths and weaknesses of potential successors, the plan may fail.
Make smart decisions: The decision of who will take over in your absence must make good business sense and should be done as dispassionately as possible to ensure the right person is ultimately in control.
Consider tax consequences: Keep in mind that there may be gift tax considerations to be made when writing a succession plan.
Review your will, trust, durable power of attorney, corporate minutes, and shareholder/member operating agreements with your attorney, CPA, and financial adviser. Identify what your current documents provide and update them if any changes are necessary. You may need a second opinion to evaluate your current succession plan. After you meet with your attorney, CPA, and financial planner, contact Bill Hesch to get a second opinion and see what he can do for you.
Bill Hesch is a CPA, PFS (Personal Financial Specialist), and an attorney licensed in Ohio and Kentucky who helps clients with their financial planning. He also practices succession planning, estate planning, and business tax planning in the Greater Cincinnati and Northern Kentucky areas. Whether you are just starting your Cincinnati or Northern Kentucky business or you have an existing business and need to develop a succession plan, contact Bill Hesch for help. He will help you develop a plan that minimizes taxes and maximizes the long-term potential of your business.