Even the most successful business owners can’t stick round forever. So after they’ve enjoyed years - maybe decades - of profitability, success, community involvement and the other joys of owning a business, eventually the time will come to step away. Some entrepreneurs choose to close up shop for good. Others would like the sweat equity they invested to mean something for the future. To make sure, they need an exit strategy.
That’s where business succession planning comes in. Organizations use succession planning as a way to ensure that when it’s time to retire or leave the business, the show can still go on. The process includes making sure that they have the right employees in key positions who know how to run the business properly and profitably – managing the staff, inventory, finances, customer service, marketing, human resources, employee communication and other essential functions that make the business successful.
Beyond that, business owners considering selling or passing along their business to a family member or friend, must plan in the most challenging and complicated areas like who will the new owner be, transition timing, transferring business ownership to the next generation or other new leadership.
Accountants should play a critical role in succession planning, but are too often aren’t even in the room when important decisions are being made. The insight of the accountant into the financial strength of the succession plan and the assurance that there are no regulatory issues is essential. Accountants can also provide financial independence and retirement planning for the present leadership while structuring the business for future longevity, stability and success.
For most business owners, their business is their life. Therefore, a succession plan will balance business, family, and tax considerations so they’ll have a succession plan that brings them, their family and business successor’s peace of mind.
As part of the business succession plan, accountants help owners deal with issues like business valuation, liquidity and estate taxes, protecting their assets, minimizing taxes, selling or transferring the business and other financial decisions that affect the owner personally and the business.
Business succession planning isn’t just for older owners. It should be a consideration for all forward-looking owners as a way to plan for unforeseen circumstances. Planning ahead now can ensure the sustainability of the business now and the future.
For more information about business succession planning, contact BWLK in Salem at 330-332-4646 or East Liverpool at 330-385-2160.