Business succession planning

At some point in time, you’re going to make the decision to leave your business. Perhaps, you’ve decided that it’s time to retire or you want to sell and move on to doing something else. Having a business succession plan in place will allow you to make a seamless transition out of your business.

Business succession planning is not only a good idea for retirement, but also in the event that you become ill, disabled, or die. Without having a succession plan in place, the future of your business and all that you’ve worked so hard to build could be in jeopardy.

A business succession plan makes it very clear as to who will take over your business, thereby eliminating any potential disputes between the parties involved. Additionally, if your plan involves a purchase, the terms of the sale and purchase price are clearly outlined to avoid any stress and hassles for your family members.

Five common options for planning succession and transferring ownership of your business include:

  • Selling your shares or ownership interests to a co-owner(s)
  • Passing ownership interests to an heir(s)
  • Selling your business to a key employee or employees
  • Selling your business to an outside interest

If your business has multiple owners, you have the option to sell your ownership interests back to your company and then distribute them to the remaining owners.

Setting the foundation now

A well-written business succession plan can be beneficial to you, your family, your business, and the successor. Some financial experts recommend beginning the process of business succession planning about three years before your retirements. However, it’s never too early to plan because you’ll be making a lot of important decisions throughout the life of your business that could have an impact of your choice of transition options down the road.

By starting your succession plan sooner than later, you and your business are prepared for the unexpected, especially if you have co-owners and/or family members to consider. Therefore, it’s important that you consider engaging the services of business succession planning experts to advise you on choosing the transition option that suits your needs.

For generations to come

Careful planning and preparation are required when it comes to crafting a good business succession plan. A CPA or business consultant with expertise in business succession planning will be able to help you write a succession plan, whether you’re choosing the option of passing on your business to the next generation upon retirement or putting your business up for sale.

The business accounting consultants at GYL offer a wide range of CPA and consulting services for businesses in and around the San Diego area. In addition to business succession planning, we also provide accounting, audit, business advisory, and tax services to our clients.

At GYL, our team of professionals will go that extra mile to help prepare a transition plan to suit your individual needs as well as the needs of business to ensure that it continues to be profitable into the future.

Contact our office today to schedule a consultation with one of our partners.