As you near retirement as a small business owner, you need to start thinking about a succession plan. That may mean leaving the business to a family member or preparing for a sale.
No matter what you want to do with your business, it is important that you have a plan in place that protects your assets and ensures your business succeeds when you’re gone.
All in the family?
For some people, the plan is simply passing the business off to a family member. However, you shouldn’t just assume adult children want to take on your business. If they don’t want to business owners, you’ll have to consider other options. Having multiple children who want to run the business can also make matters more complex.
Protect your retirement
According to one survey, 78 percent of small business owners expect to fund their retirement by selling their business. However, fewer than 30 percent have a written plan.
It is important to not just have an idea in your head, but to actually map out the details. You have to consider your current employees and all the issues associated with running the business, in addition to ensuring your finances are taken care of.
Iron out the details
Everything you do as a business owner will be passed on to the next owner. From managing human resources and payroll to tracking inventory and expenses, everything continues even after you retire.
The good news is that with a proper plan in place, business succession can be a smooth process.