How you exit your business is just as important as how you start it. CBS Financial asks questions that encourage you to think about your business in the future. When will you exit? Who will you sell to? What is a fair price? What are the tax and legal implications? These topics often get ignored on the day to day activity of your business, but they are important questions to consider.
Don’t make the government your beneficiary
Your business is most likely your largest asset. You invested your time and money in it. And now as you approach retirement, you‘d like your business to help fund a comfortable and rewarding lifestyle. Good business succession planning increases your chances of success.
Planning your business succession sooner rather than later gives you the time to explore the many options available to you, choose the one that best meets your needs and prepare for a smooth transition.
Succession planning can be complicated – from establishing the value of your business and managing tax implications to communicating your intentions. It can take two to five years to implement a succession plan, so the need to start planning may come sooner than you think!
Another reason to start early is because a succession plan anticipates what would happen to your business if you were to die prematurely or were unable to work for a long time. Without a succession plan, one of the following could happen:
- The government could become your unintended beneficiary
- Family members who are unable or unwilling could be left to run your business
- Your family could be forced to sell your business at less than market value to settle estate taxes
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