Every small business owner needs a plan for passing the business on when they retire and whether or not they have such a plan in place, most of them know it.
What may escape their view is that sudden developments – market driven or personal, we’re all vulnerable to them – could force their hands and demand that the process begins sooner than expected.
As usual, the time to plan for succession is today. Let’s examine some steps that small business owners can take to prepare for the day when they step into an easier mode of life and let someone else take on the headache and joys of owning the business.
The first step is to get your paperwork in order. Potential buyers will want to know everything about the business: its performance over the years, inventory on hand, tax history, debt and many other issues. Preparing these records beforehand – and this is not necessarily an easy matter – will smooth the process and save you headaches when it’s time for serious discussions.
Set up buy-sell agreements. These contracts are vital if there are several owners in the business. They legally establish each one’s share in the company, set its true value for sale, and determine the rules to guide the eventual sale of the firm. These agreements are vital in case one of the owners is suddenly incapacitated or dies. Even if the partners remain hale and hearty at retirement age, buy-sell agreements can help them move forward smoothly, without any unnecessary conflict.
For more information, please read:
Why Every Small Business Owner Needs to Start Their Succession Planning Now | Inc