As a business owner in California, you’re busy thinking about what you need to accomplish today. About taking inventory, or meeting with clients or doing an employee training.
Who has time to think about tomorrow – especially the far-off future?
When it comes to what’s known as business succession planning, you should make the time, however.
You’re not planning to retire soon, but you still need to plan for the unknown. In the case of your disability or untimely death, you must have a plan for what will happen to your business.
There are several ways to transfer your business to another owner, so let’s focus on some of the most common ones.
- You can arrange to pass your share of the business to a family member or family members
- You can decide to sell your percentage of ownership to your co-owner or co-owners
- You can agree to sell to a longtime employee when the time comes
- You can accept the offer of an outside party to buy the business
- If your business has multiple owners, you can see your shares back to the company
Each option provides you with peace of mind about the future. The succession plan confirms who will take over the business and reduces the chance that there will be squabbles between interested parties. If, instead, you are going to sell the business one day, the sales price and terms are set. All of this could be a big relief to your family if the business must change hands when you are gone.
Any of these options will have advantages, disadvantages or special considerations. Before you enter into any agreement about the future of your business, it would be very smart to consult with an attorney experienced in succession planning. There’s a lot to consider, with potentially a lot of money on the line for your family.