Succession Planning
If you have a business partner who is also part owner, what would happen to their share if they passed away unexpectedly? Without proper planning, you...
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Succession Planning
If you have a business partner who is also part owner, what would happen to their share if they passed away unexpectedly? Without proper planning, your new business partner could be their spouse or children. I can help eliminate this threat.
In 2005 I read an article from the American Institute of Certified Public Accountants (AICPA) discussing the topic of succession planning and what its own members have done for their own succession planning. The article quoted a 2004 survey that only 19% of its members have a written succession plan. I thought that number seemed way too low, so I re-read the article & sure enough, it was only 19%. As I re-read the article, I saw that 22% of its members felt that they didn't need a succession plan. Talk about an ostrich sticking its head in the sand!!! Numbers like these indicated why only a handful of businesses survive into the third generation. What a shame to have your life's work more than likely gone within a generation.
If you read the fine print in an annual report, you will see that there are many things that big corporations do for their own succession planning. Maybe you're not as big as General Electric, but I bet planning the future of your business is a whole lot more important to your family than what GE does.
So what should I do?
Let's plan for the future. Tell me what you want to happen, whom you want it to happen to (or in case of that pesky son-in-law, don't want it to happen). What are the threats to your plan? Is it taxes, fairness to non-owner children, minority business owners, or the wrong type of corporate structure?
What about disability?
What if the person was fortunate not to pass away, but instead suffered a disability? What plans do you have to still effectively run your business should this unfortunate event occur? The Buy-Sell is an essential component of succession planning, yet is used so infrequently.
A Team Approach
As this plan is being prepared, we will include (or find) your CPA and attorney. I used the example of GE. I can promise you that they use a team of people when planning their future — accountants, attorneys, bankers, etc. You probably don't need as many people, but still deserve the same comprehensive planning that comes from involving a team of people focused on your dreams and desires.
A 2004 AICPA survey found that only 19% of members have a written succession plan — and 22% felt they didn't even need one.
Fee Information
Fees are taken on a case by case basis depending on the many factors that go into this type of planning. After we have a thorough meeting and I get an understanding of your goals and the obstacles we have to overcome, I will quote your fees and that quote is firm for 30 days.
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