If you own a small business, retirement isn't simply a matter of deciding not to go into the office anymore. You've got some critical questions to answer like...
"What happens to the business when you're no longer running it?" and
"Will you have enough money to retire?"
The family dynamic complicates the whole transition because of the relationships and emotions involved. Most people are not comfortable discussing topics such as aging, death, and financial affairs.
Comfortable or not, succession planning should be a priority for any small business. Developing and implementing a well-designed succession plan is essential to the survival of a small business.
I will help you with these key issues -
· If you have partners? What will happen to each owners share of the business when one retires or dies? If a partner dies will the spouse or next of kin become the new owner or will the Company purchase your shares
· Keeping it in the family. Are you going to pass the business on to your family or sell it to a third party?
· Who's going to run the business when you're gone? Management and ownership are not one and the same. You may decide to transfer management of your business to just one of your children but transfer equal shares of business ownership to all your children, whether they're actively involved in the business or not.
· Minimizing the tax bite. The tax burden when transitioning a family business can be significant. The challenge is that a family business is not generally a liquid asset, but taxes are typically due when ownership is transferred.
