Succession planning is a smart choice for Maryland business owners
Retiring baby boomers are behind a surge of small business sales across the nation, according to the Huffington Post. In Maryland, companies are changing hands and new businesses starting up on a regular basis, creating a healthy environment for entrepreneurs.
Whether you are a new business owner or have owned your company for many years, it is important to establish a business succession plan and strategize about the future.
Start planning early
Many business owners fail to establish a succession plan when they should. An unexpected illness or death of an owner or key manager can throw a company into a tailspin from which it may not recover. A succession plan can lay out what to do if a key individual or a particular business situation arises.
It is never too early to plan for the future. An additional benefit to doing this thinking early in the life of your business may be that of helping you define where you want it to go.
Business owners should not dive right into establishing a precise strategy. The first step should be carefully examining the intended end-goal to the succession plan. There are often numerous emotions tied up in a business – especially if it is family-owned – and emotional attachments to particular aspects of a company should not be ignored.
Is there a desire to have the business evolve and grow in order to hire and support more family members, or is the intent to maintain the status quo? Maybe a leaner, tighter operation is what co-owners want. Upon deciding which direction to take, research your options, the viability of each and the effect it will have on the business, the owners and the employees.
Consider various options
Companies change with the times; that is how they stay in business. A business succession plan should take this into account, and owners or managers should craft succession options that may work in a variety of future possibilities.
Consult an attorney
An important factor to establishing a succession plan for your corporation or business is to consult an experienced business lawyer. An attorney who offers comprehensive services to small businesses may be able to help you create a succession strategy that can include such tactics as:
- Taking advantage of tax avoidance options
- Transferring business assets
- Structuring a sale or ownership transfer
- Designing an estate plan around your plan
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