As the owner of a small, closely-held, or family-owned business, you understand how important planning is to your company’s growth and success. That is why you regularly prepare budgets, craft strategies, and make investments designed to best position you for prosperity in the quarters and years ahead. You probably also know that if you do your job right, your business may outlast your active role in it (or your active role on earth). That is why you understand the critical importance of business succession planning.
Intuitively, you know that the lack of a clear and comprehensive succession plan can have devastating consequences for your small business, especially when you retire or want to sell your company. You know that you should address these issues now because chaos and conflict will ensue, and continuity will be hard to maintain if you pass away suddenly or become incapacitated by an unexpected tragedy. After all, that is why you’ve already prepared a comprehensive estate plan for your family. But knowing that business succession planning is essential and actually doing something about it are two different things.
Florida Business Succession Planning for the Unexpected – and the Inevitable
At Ginsberg Shulman, we work closely with Florida based business owners and companies of all sizes to create succession plans that help owners simultaneously protect their businesses, families, and retirement dreams. We can reduce tax liabilities by crafting and implementing holistic plans that integrate business succession and estate planning strategies while increasing the value of assets passed on to heirs. The plans and structures we put in place can set a business on a stable path that avoids disruption and minimizes the likelihood of conflict and confusion after an owner passes away or relinquishes ownership and control.
Succession Planning Is a Blind Spot for Otherwise Savvy Business Owners
If you haven’t crafted a succession plan, you have plenty of company. PwC’s 2021 US Family Business Survey revealed that only 34 percent of family-held business owners reported having a “robust, documented and communicated succession plan in place.”
Given how much of their business and personal fortunes depend on succession planning, how could so many smart, driven, and forward-thinking entrepreneurs have this huge blind spot? It’s for the same reason that so many otherwise successful and sophisticated people don’t have an estate plan: it’s hard to think about being gone and leaving everything behind, whether the family you love or the company you’ve built with your own two hands.
A Business Succession Plan Can Provide Answers to Vital Questions About the Future of Your Business
The strategies and vehicles we suggest for your business succession plan will depend on your unique goals, the family and company dynamics involved, and the size and complexity of your asset portfolio, among many other factors. Regardless of your specific circumstances, a business succession plan can and should provide answers to these fundamental questions about the future of your business and your finances:
- When owners want to sell or transfer their ownership interests, is there a written operating agreement, shareholder agreement, or buy-sell agreement that sets forth how and when they can do so and who can acquire their interest?
- Have you named and prepared a successor who can take over management of your business if something happens to you tomorrow?
- Do you have a plan for ownership, control, and governance of the business in your absence?
- Is there a document that clearly delineates the roles and responsibilities of shareholders or members?
- Is there enough liquidity in your company to avoid a forced sale?
- Are you relying upon your interest in the company to meet your personal cash flow needs for retirement, and if so, how will you ensure that you have sufficient income for those needs?
These are just a few of the questions and issues you need to answer and address to ensure a smooth transition for your business, harmony for your family, and security for your retirement. At Ginsberg Shulman, we collaborate with business owners like you to create comprehensive business succession plans that ensure the company you worked so hard to build continues to thrive while providing you with the peace of mind you deserve when that work is done.
How to Start Your Business Succession Planning
Besides meeting with experienced business succession planning counsel, here are three ways you can jumpstart your business succession planning efforts:
- Start today. With business succession planning, sooner is definitely better than later. If you have already started to think about handing over the reins or retiring in a few years, you simply have no time to waste. Even well before then, the unexpected can always happen and leave your company in the lurch.
- Assemble your team. The legal, tax, financial, and practical implications of an ownership and leadership transition can be overwhelming. What may make sense in one context could have negative consequences in another. That is why it is important to assemble a seamless team of professionals, including attorneys, accountants, tax advisors, and senior leadership at your company, to consider and account for all aspects of your planning.
- Talk. Open discussion and communication with family members and company leadership is critical to a smooth transition and minimizes the chance of disagreement and confusion later.
Ginsberg Shulman: Ft. Lauderdale Business Succession Lawyers
As lawyers and as small business owners ourselves, we know how important it is to plan for the unexpected—or the inevitable. This includes preparing yourself and your business for the transitions that will come sooner or later. Our business succession counsel focuses on positioning your company for continued success while providing you with the well-earned security and peace of mind you deserve. Please contact Ginsberg Shulman today to discuss how we can help you with your business succession planning needs.