Small businesses are the backbone of Ohio and the rest of the country. Many of these businesses are family owned and have been this way for multiple generations. As with any business, planning for the future is important. A sustainable business succession plan is critical for a small business to make sure it continues on well into the future.
A business succession plan has many advantages for business owners. It can help the business make a successful transition to the next generation, align the interests of current and future business owners and help reduce probate disputes, among other matters.
There are five steps businesses can take to make sure their business continues to grow into the future:
- Establish goals and objectives. There should be a collective goal for the business. A family should determine and consider the importance of having family members stay in the business operations, a business owner’s personal retirement goals and goals for the next generation.
- Determine a decision-making process. Family members should be identified as to whom will make decisions and a process should be created if any disputes arise.
- Create the succession plan. Successors should be named, and family member roles should be determined.
- Create a business and owner estate plan. This should cover where tax and probate issues are addressed along with a buy/sell agreement that reflects the value of the business and minimizes taxes.
- Develop a transition plan. This would include how the business will be transferred, whether through a gift, purchase or a combination of the two. It should also include a timeline of the transition.
An attorney who specializes in business law can help business owners plan for success well into the next generation. A sustainable business succession plan can be complicated, so having an attorney help with the details specific to your unique situation can make a big difference.
Small business owners want their business to continue for many more generations. With the proper planning and considerations, this can be accomplished.