What is a Business Succession Plan?
You have worked hard over the years to build a business that consistently generates wealth for you. At some point, by design or not, you will no longer be able to operate your business. A succession plan outlines a step-by-step plan for you to exit your business while ensuring it still carries on in your absence.
Do you have a succession plan for your business? How would you feel if you did?
There are a couple different reasons why having a succession plan is important. If your key staff sense uncertainty about succession or feel like change is inevitable they could see it as a reason to leave. Losing top talent is bad in itself, but can be devastating if they start a competing business or take clients to a competitor. Power struggles can also occur internally within the business and have a negative impact on work culture. Perhaps most importantly, without a proper company succession plan you risk undoing all the work you’ve put into building the business you have today.
When you go through the company succession planning process, the most important thing you gain is clarity about the future. You’ll develop a set plan that gives everyone involved with your company a sense of confidence. Because every business is different your company succession plan has to be customized to you; there’s no one-size-fits-all approach.
The company succession planning process will take you through a framework of questions designed to clearly define your goals and establish what you want to do. The next step will be to identify what barriers exist between where you are now and where you want to be. Potential barriers include corporate structure, tax issues, and/or business financing.
The company succession planning process is designed to answer questions like:
When do you want to exit your business?
What does your role look like between now and your exit?
Will you shut down your business? Sell it outright? Or pass it along to family?
What tax implications will there be when you exit your business?
How can you ensure your tax liabilities are as low as possible?
If you are passing your business to family, how will that work? Will they pay for it? Will it be gifted?
How will financing arrangements be maintained? Does the person you are passing the business to have the borrowing capacity to maintain these arrangements?
How will key staff members be retained through the succession process?
At Greg Evans Professional Corporation our team has the expertise to guide you through these questions. We will create an action plan with a clearly defined timeline so you can be more confident about the future. Greg Evans is a CPA CA with in-depth tax knowledge; he’ll make sure your company is structured with a succession plan that makes your overall tax liabilities as low as possible. Brian Rump, our Director of Advisory, has a background in commercial banking and has witnessed firsthand the consequences of poor planning. Greg and Brian want to help you avoid common mistakes and ensure the continuity of your legacy. Book your free consultation today to get started (link at top and bottom of the page).
When you have a clear succession plan in place, you don’t have to worry about the future of your business. With a clear plan you know exactly who will take over and so will other important parties. You will also have the comfort of knowing that you are not paying any more taxes than you need to when succession takes place.
Book your free consultation today (link at top and bottom of the page) to get started creating your own succession plan.