As Benjamin Franklin so famously wrote, “In this world, nothing can be said to be certain, except death and taxes.” As a businesswoman, you prepare for taxes. You have probably spent hours over the years preparing for inevitable taxes. But how about death? Have you spent any time preparing your business for your eventual death, disability, or retirement?
When your children are young, one of the most important things you do is name a guardian for them in your will. You want to be the one to make the decision of who raises your kids if something happens to you, not the courts. You probably put a lot of time into considering your different options and what would result in the best possible outcome for your children. I’m sure it was a very emotional decision.
And for many of us businesswomen, our businesses are like another baby. We nurture them, watch them grow, and are emotionally invested in them. Shouldn’t we have a plan for them just like for our children? None of us want our businesses to fall apart if we become incapacitated or die and the only way to do that is to develop a strong succession plan.
Succession Plan Options
Here are some options to consider when beginning your succession planning process as well as some of the details that need to be addressed:
If you are in a partnership, will your partner want to buy out your heirs? How will the buyout be funded? Are your heirs all onboard with the plan?
Merger or Acquisition
Are you going to merge your business with another firm? How will the sale price be decided? How and when will your heirs be paid? What is the timeline for the transition? What role will your key employees play in the merger and are they prepared?
Successor From Within
Are you going to pass your business on to one of your children or put a key employee in charge? What do you need to do to prepare them for the responsibility of running your business? Do all of your heirs understand your choice and agree?
If you have no one to pass your business to, are you going to close down? Do you have a plan in place for closing down and selling off assets? How will you ensure that your customers and clients continue to be serviced?
Who Benefits From A Succession Plan
Having a succession plan in place is not optional, it is essential for a healthy business. You owe it to your family, successors and clients!
Losing you would be difficult enough for your family. You don’t want them to suddenly find themselves with a business on their hands that they don’t know what to do with in the midst of their mourning. Show your family that you love them by taking care of all possible details before your passing. Proper succession planning takes the burden off your heirs and provides for them financially.
If someone will be taking over the business for you, they need to be adequately prepared. You need to train them properly and let them know what to expect. Taking over a business is challenging at any time, but if it is sudden and unexpected, with lacking preparation, it could prove to be devastating.
Your Clients and Customers
Your clients and customers have honored you with their business and helped you become successful. After years of productive relationships with them, you don’t want to leave clients feeling abandoned. It is also important to communicate with your clients that you do have a plan in place. If they hear you discussing retirement, or see you aging and slowing down, they may get worried. If they see no future with your company because of a lack of succession plan, they may begin to take their business elsewhere, which could hinder your successor or lower your value to a buyer.
As you may know, at Engaging Women in Wealth, we have a succession plan in place to take care of our clients no matter what. To learn more about our plan, contact us today.
Creating A Succession Plan
Creating a succession plan can seem like a daunting task to a busy businesswoman. Take heart, you’re not alone! At Engaging Women In Wealth, we walk with you every step of the way. We work with your team of professionals, from your CPA to your attorney, to create and implement an orderly succession plan for your business. Call us today at 858.756.0004 or email [email protected] to get started planning for your business’s future today!
About Deb Sims
Deborah Sims is the Principal of Estate Management Group, a wealth management and financial services firm offering comprehensive and customized strategies to help her clients manage their assets and feel confident in their future. Her mission is to serve as her clients’ most trusted wealth advisor through professional knowledge, integrity, and personalized wealth management services. Based in San Diego, California, Deb’s team has offices in Rancho Santa Fe, Old Town, and Del Mar. She invites you to contact her team today to learn more about how they can help you.