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Retiring from managing a family business is not as easy as just packing your things up from the office and leaving and waiting on your monthly pension for all of your life. A lot of things have to be considered as you are not merely an employee of the business but you are the business proprietor. That is where the issue of succession comes in.
Questions arise upon your stepping out of the ball game such as “Who will be the next one to run the business?” and “Will you have ample money to live on when you retire?”. This is more difficult in family businesses due to the emotions and ties involved. The decision of who will ultimately inherit which and who will possibly take over your position as business proprietor will even be harder for family most especially if there is more than one person who is rooting for your position like for instance siblings who share equal interest in running the business. Although this may sound as hard as it is, it is one decision that you will have to make someday.
Developing a well-designed succession plan will always be a part of the business and this is one of the services that we at Advanced Global Consulting Firm specialize in!
We may provide you with our expert opinion on the following key issues –
- Keeping it in the family. Are you going to pass the business on to your family or sell it to a third party who is willing to buy the full shares of your business? We will help you weigh the advantages and disadvantages of each of these options.
Who’s going to run the business when you’re gone? Management and ownership are not one and the same. This is equally true in any business. Although you are the one who started the business from scratch certainly does not mean you have to be the one managing it in its mature state. There are professionals whose expertise lie in managing businesses such as part of the services we offer in Advanced Global Consulting Firm or anyone with a degree in business administration or management for that matter.
You may even opt to decide to transfer management of your business to just one of your children but transfer equal shares of business ownership to all your children, whether they’re actively involved in the business or not.
Minimizing the tax bite. The tax burden when transitioning a family business can be significant. The main challenge is that a family business is in general not a liquid asset, but taxes are typically due when ownership is transferred.
Making it fair. Transferring family ownership often adds a tremendous amount of stress to individual family members. The heaviest burden lies on you who will be retiring from your post as proprietor. Your decisions will have both positive and negative impact on your family members. Positive on the part of the one you choose to be your immediate successor while negative for the one you did not choose but was a potential candidate and aspirant.
Part of what we do is to share your burden by talking with each of the family members to ensure that they feel they are getting an equitable and fair share of the pie. We will make them understand the business in its aftermath of the succession and make them comprehend and appreciate the value of their benefits.
What Advanced Global Consulting Firm can do for you:
Once we understand how you feel about the key issues above, we begin constructing your succession plan focusing on these 5 issues…
- Business Valuation
- Business Restructuring
- Tax Consequences
- Retirement Projections
- Tax Projections
Let us help you pass on what’s taken a lifetime to build by requesting a Free Consultation below.