Thursday, February 23, 2012
It is never too early to start thinking about succession planning. All business owners eventually reach a point where they want to retire, they want to slow down, they want to try their hand at something new, they want to give the younger generation a chance to show their stuff or they just want to cash out. In every case, it is a smoother and generally more profitable transition if the owners have taken the time to plan and think through what is required to successfully transition their business.
Succession planning may involve sale of the business. But to whom? To employees? To family? To suppliers? To customers? To competitors? And for how much? Is there a reasonable methodology for setting the value of the business?
Succession planning may involve gifts to spouse, children and grandchildren. But are they competent to run the business? Is the management staff competent and loyal enough to work with inexperienced family members while they come up to speed?
Succession planning may involve stock options or deferred compensation or other arrangements with key employees designed to keep them on board after the owners have moved on. Do you have a group of employees who have the experience and skill to run the business after you are gone? Have you given them the ownership and/or compensation incentives needed to win their loyalty and keep them on board.
Succession planning may involve employee stock ownership plans and other retirement plan vehicles. By using these qualified retirement plan vehicles, business owners may be able to create a market for their stock where no market otherwise exists, and may be able to sell their stock in a tax-advantaged away. But are the possible tax savings worth the cost and administrative complexities inherent in such arrangements?
Will get into more succession planning issues in future blogs. Please give me a call if you want to discuss succession planning and how we can help you. Jsenney@pselaw.com or 937-223-1130.
AND ONE MORE THING. I am please to announce that immigration attorney Shahrzad Allen is now working with us. If you or one of your clients needs assistance with a VISA or other immigration matter, please give me or Shahrzad a call. Jsenney@pselaw.com or Sallen@pselaw.com or 937-223-1130.
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Pickrel, Schaeffer & Ebeling Co., LPA, 2700 Kettering Tower, Dayton OH 45423
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