After creating a Succession Plan, how do we begin to implement it? Happy Friday everyone and welcome back to Finance Friday. A business owner’s company is an important cog of their wealth and therefore requires careful and timely planning. You’ve assembled your Financial and Business Advisors and are ready to start the conversation. Here are 3 steps to take once the conversation has begun:
- Review and update your estate plan documents and operating agreements:
Experts believe that one of the best ways to a smooth transition is to combine Estate Planning with Succession Planning. We are naturally inclined to consider both separately, however, combining them creates a strategy that helps maximize value and minimize taxes. Your estate planning attorney can review Trust strategies that can help business owners keep and maintain control of the company while also reducing Estate Taxes.
- Create a clear succession, sale, or legacy plan:
So, when is the best time to sell? The answer isn’t simple. Timing depends on different factors, such as Market conditions, readiness of management, & owner’s personal goals. Business owners should constantly monitor business valuations as it will help to identify windows favorable for a sale.
- Communicate your plan to key stakeholders and prepare them for their roles:
Making sure key managers and employees are aware and prepared for the transition is vital.Owners who begin early and engage proactively with their employees will own the greatest flexibility when it comes time to sell.
Remember to revisit the plan regularly with your Financial Planner in order to keep it current and effective.
Remember to submit your questions and thoughts on our discussion to hector@hrcfin.com. Don’t forget to follow HRC Financial on Facebook and LinkedIn for more Finance Friday Tips and Insights.
Thank you for your time this morning and we’ll see you next week for our Question of the Week on Finance Friday!