Question 1: What is business transition planning?
For the business owner, determining what is the proper time to step away from your business and hand the reins over to someone else is a complicated one to make. A business transition plan will allow you to smoothly transfer authority to the new manager or owner once you have decided to leave.
Question 2: How do you determine when to step away?
There’s no simple answer to this question. Your business role is an indelible part of who you are. Stepping away from that can be as difficult a decision as you may ever have to face. Regardless of the role you play in your company, it can be very helpful to establish specific goals you may want to reach before you choose to leave. If you can’t think of any, focusing on your family, hobbies, and what you want to accomplish after you leave your business can help you establish a time frame for when you want to leave.
Question 3: What do I need to do to make the transition?
That will depend upon several factors. If you have a small business or farm, or similar small organization that doesn’t require a lot of planning, the transition planning process may be very simple. However, the larger your business is and the more responsibility you have, the greater assistance you will likely need. In addition to hiring an attorney, you may need advice from accountants, financial advisors, or others who specialize in the transition process.
It is important for busness owners to have an effective and comprehensive “exit strategy.” Failing to plan is inevitably going to cause a failure to have an effective transition. The turmoil, taxes and trouble that can result can often spell the disasterous end to a successful business.
Plan now before death, disability or retirement are imminent. Start with a consultation with an experienced and qualified estate planning attorney.