Business Succession Planning – John Dewey Prepares you for the Entire Process

Business Succession Planning – John Dewey Prepares you for the Entire Process

The one type of business plan that is often pushed to the side and forgotten, but is one of the most important plans for family businesses is business succession planning. This is the plan that maps out a strategy for the company and who will take over the keys upon retirement of the current owner. There are a few questions you need to figure out in order to determine the most effective plan for your business. You should decide if you are going to transfer the business upon retirement or if it would be after passing. There should be someone in line to take over ownership. You also should decide if you plan to have someone in line to take over management, or if that will be a decision left for the new owner. An important part of this process is also realizing how the personal relationship with clients will be affected and how you can make a smooth transition with the transfer. With the help of John Dewey Business Succession Planning you can develop a strategic plan ahead of time to alleviate some of the stress of worry that may come with this process.  There are essentially three levels to this process that John Dewey will walk you through.

The first level is transferring management. The day-to-day management is a position that can be passed on to a next of kin, key employees, or a combination of both. Whoever you plan to transfer management to needs proper training starting as early on as possible, so that when the day comes you can walk away from the position and rest assured that they know how to manage the business and keep it afloat. This step is one of the hardest of many, because you are walking away from the control of the business structure and decisions. John Dewey Business Succession Planning can help you build your management team to full potential. He can help you prepare them for the future success of your family business. In a family business, it is likely that the keys are handed down to the children to take on a leadership position in the future business. It’s important to build the team and support between your future family key holders and the employees. A gradual transfer or roles and responsibility with the business will give the successor and the employees a chance to grow into their new roles.  This also allows you to get used to your diminishing role before the time of the transfer. This is why it is so important to start this process early.

Business Succession Planning – John Dewey Prepares you for the Entire Process

Business Succession Planning – John Dewey Prepares you for the Entire Process

The second level to this plan is transferring ownership. This may seem like it’s similar or the same, but they are very different roles and it’s critical to this process for you to tell the two apart. Ownership is, in most cases, the role that is left strictly for family. The most common issue with family businesses is how to pick the right child, or on the opposite end, how to treat all the children equally in the business succession process. Some businesses transfer ownership to their oldest child. Some transfer to the child most active in the business or with the highest level of leadership. Others split the ownership and assets jointly amongst all of the children.  John Dewey Business Succession Planning can help you to decide what plan fits your family and your business best. Another worry that strikes up with this process is guaranteeing that if the transfer is done upon retirement that you will get your sufficient retirement income from the continued owner. This is a big part of the process that John Dewey can help you prepare for.  Upon transferring ownership both parties should enter what is called a buy-sell agreement. This is a legal arrangement providing for the transfer of ownership and would include price and payment terms if the business is being sold, and a time or life-event or when the transfer will be done.

The third and final level of this process is one that is usually procrastinated and put off until the end, which can cause a massive paperwork headache. John Dewey Business Succession Planning focuses on minimizing all gift and estate taxes during this process. Do to his expertise in business succession planning he can lower the cost of these taxes, and possibly even avoid them completely. The gift and estate-tax consequences in this process deserve close attention. If this process is ignored you may be faced with liquidating the business, or even letting he business go under, pushing a debt onto your children. There are multiple resources programs and option that John Dewey will educate you the best to determine what fits your needs and will be most effective for the success of transferring the business. One of these options that makes gifting the business to family a simpler task when planned ahead is by using the annual gift tax exclusion in your favor. You can transfer so much of the value of the business over as a gift per year without getting taxed. If you start early enough on this plan with the help of John Dewey, this may be an option to avoid taxes completely. There are different plans for different sizes of businesses. Due to all the regulations, caps, and fixed rates this can still be a difficult process. Call John Dewey today and let him take that stress out of this equation.

Business Succession Planning – John Dewey Prepares you for the Entire Process