Have you thought about what is going to happen to your small business when you die? If not, you shouldn't think that you have all the time in the world to make these plans.
The plans that you make for your business are known as succession plans. These lay out who is going to take over your responsibilities and what is going to happen to the business.
Some small business owners think that it will be easy to just sell the business instead of coming up with succession plans. The issue with this is that there might not be time to wait on the best time to sell. Additionally, the people who you leave behind might not want to part with your legacy.
As you think about succession plans, you will have to determine who is going to fill your shoes when you can't take care of the business owner. This person has to know about how your business is run and understand the intricacies of the business. The person must be able to grow the business and be familiar with handling anything that can come up.
You also have to think about how others might take the succession plans. One issue that can creep up is when siblings think they should each take your place. You will have to come up with a plan that shows your wishes. This might mean dividing your stake in the business so each child has a share. It could also mean dividing your duties.
Ultimately, your succession plans have to based on your goals for the business and for those who count on it for support. Some business owners have set up their family members in other ways and left the business to long-term and dedicated employees. The choice is all yours to make.
Source: Wealth Management, "The Myths and Realities of Succession Planning For Small Businesses," David Scott, accessed Oct. 17, 2017