Succession Planning
EXPERTISE
We provide a financial plan that’s regularly monitored to achieve your financial goals.
COLLABORATION
We work with you and other professionals to ensure all aspects of finances are looked after.
FINANCIAL CLARITY
Spend time enjoying what you love most knowing you have financial clarity.
PEACE OF MIND
Know that your finances and the people that matter in your life are taken care of.
Succession planning is an essential part of being a business owner.
It is the process of transferring ownership, management, and interest in a business. It is crucial to have a plan in place during a business’s survival, growth, and maturity stages. All business owners, partners, and shareholders should be involved in the process of succession planning.
Two types of events can trigger the need for a succession plan: controllable and uncontrollable.
Controllable Events
Controllable events include the sale of the business and the business owner’s retirement. When considering the sale of a business, it is vital to consider the potential buyers, such as a family member, a manager or employee, or an outside party. Each option has its advantages and disadvantages, and it is essential to consider all options before deciding. When it comes to retirement, it is vital to consider the financial and psychological needs of the business owner, as well as the impact on the business.
Uncontrollable Events
Uncontrollable events that may trigger the need for a succession plan include divorce, illness or disability, and death. In the event of divorce, it is crucial to consider the portion of business shares held by the spouse and whether they would be willing to sell their shares. If the spouse continues to hold an interest in the business without understanding or contributing to it, this can be a problem. It is also important to consider the impact on other partners or shareholders if they are required to work with the disgruntled spouse.
In the event of illness or disability, it is essential to consider the ongoing income needs of the business owner, their spouse, and their family. If there is a shortfall, it is crucial to have an insurance or savings program in place to make up for it. It is also essential to consider the ownership interest in the business and whether it will be retained, liquidated, or sold. The company may also need capital to continue operating or to hire a consultant or executive, and debts may need to be recalled.
In the case of death, it is vital to consider the ongoing income needs of dependents and the ownership interest in the business. The ownership interest may need to be retained, liquidated, or sold by the estate, and it is crucial to have a will that addresses these issues. The business may also need capital to continue operating or to hire a consultant or executive, and debts may need to be recalled. It is also essential to consider the impact on employees.
Creating a succession plan is a complex process and working with a professional team is advisable to ensure its success. This team should include a financial advisor, a succession planning specialist, an insurance specialist, a lawyer, and an accountant/tax specialist.
If you are a business owner needing help with succession planning, don’t hesitate to contact us. We can help you organize your succession planning so you can have peace of mind knowing that your business is taken care of.