“Only 26% of small business owners have some type of succession plan in place.”1 Many business owners indicate they have “plans” in their minds about how the business will continue but never actually implement one. The most important step in the planning process is getting your ideas out in the open. Begin your business succession planning by answering the following questions:
• Is your current plan to sell the business, reduce the amount of time you are involved with the business or transition the business to family or key employees? If it’s a transition, over what period of time would you like the transition to take place and are the individuals aware they are being considered so they can plan?
• Do you have family in the business? What roles will they play? Do you fear that they may be inexperienced? Do you have key people that can provide guidance until they are ready to take over?
• Do you want to treat your children equally? Have you considered how to do that if some are in the business, and some are not? Have you discussed this with your spouse?
• What will happen to the banking, business and client relationships that reside primarily with you? Will they remain with the business?
• What will become of the employees if you sell compared to transition the business?
• The business may support your income needs currently, but have you considered what your ongoing income needs will be?
• Will your retirement be dependent on payments from the business? What happens if the business runs into financial problems?
• What have you done to plan for your qualified plan assets? Did you know they may be subject to income and estate taxes, with as much as 70% going to the government?
If you have questions about business succession, please contact National Benefits Group at 952-449-4030 and visit our website http://www.nbginc.com
1 (LIMRA International, Small Business Owners 2005 Report)
Securities offered through ProEquities, Inc., a Registered Broker/Dealer, and member FINRA and SIPC. NBG is independent of ProEquities, Inc.