Business Succession Planning
When a small business experiences a sudden event, like the death or disability of the owner or a partner or major stockholder, it’s a tough time for everyone. But in addition to the personal impact, there are a lot of things that impact the business – from the immediate, like who signs contracts and writes checks? To the long-term, like what does the future of the business look like?
Here are some steps your business can take now to make what’s bound to be a difficult time a little easier.
First, in the next few months, make sure someone, in addition to the owner, is fully aware of the key aspects of the business. This includes everything from knowing where the checkbook and banking records are – to knowing key customers and vendors.
Second, if there are multiple owners of the business, consider some form of buy/sell agreement. Often, a relatively simple document can provide a framework for the sale of ownership.
Also, it’s important that the business owner’s estate plan is up to date. With successful companies, surviving family members are often forced into company sale decisions just to pay estate taxes.
And—make sure key individuals, like family members, important employees, partners, and trusted advisors are aware of the owner’s wishes, thoughts, and ideas.
These are not pleasant issues to consider; however, for the benefit of the business owner’s family and the employees (and customers), some planning can make a large difference.
For more information or to find support for small business owners, contact your local Coastal Community Bank branch, or try one of these helpful resources:
- Small Business Administration—www.sba.gov
- SCORE — www.score.org
- Small Business Development Center — www.sba.gov/tools/local-assistance/sbdc
This blog is provided for general information purposes only. The information provided should be used at your own risk and not as a substitute for legal and other professional advice in your state.