It is impossible to know how events will play out, both on a grand scale and in small and unexpected ways. Last minute decisions, like those of the rock musicians who won seats in bets and then were killed in the Buddy Holly plane crash in 1959, are often said to be a function of fate or a larger plan. But that is not how you want to handle planning for the succession of a family farm. Today's family farms are poised at an important place in time. A lack of planning could spell a disaster for families, farms and our national ability to produce food.
If you've been in business for long, chances are you've heard at least a few tales of probate problems plaguing family members, would-be successors or remaining business partners. So, how can you avoid probate?
Building a successful business takes hard work, careful planning and significant foresight. When a business has been able to maintain its success for a significant period of time, owners and/or executives must begin the task of succession planning. Family owned and operated businesses face particular challenges in this area.
The last big M&A wave happened in the early 2000s, according to Ward. A very active M&A period is usually accompanied by a lot of debate, both within families, and at the policy level, about the pros and cons of having families or professional investors control businesses.
The emotional toll of leaving an enterprise that you own is underestimated, said Harry Armon, a serial entrepreneur and president of the estate planning firm ARCAP Partners in Jericho.
Whoever you name as your financial power of attorney makes all of your financial decisions. By specifically picking someone to make those decisions, you help eliminate controversy and stress.
These two experiences taught me a lesson about family businesses. Making a family business a family legacy takes planning and preparation. While each family business has its own unique issues, there are some common strategies associated with succession planning.
For [some business owners], let's call them the "able but not quite ready to retire" business owners, the thought of handing off the business they built and walking away is an unsettling, if not gut-wrenching, decision. For these business owners that have also established their business as a corporation (not an option for partnerships), an Employee Stock Ownership Plan (or ESOP) may provide a better retirement option.
You are looking to sell your small business, and you expect the best possible outcome for both you and your company. In order to get exactly what you desire out of the impending sale, you must be forward-thinking enough to define your goals before even thinking of getting your business on the market.
Successful Family Business Succession Tips
A family succession is often the most logical and practical way for a small business owner to exit the company. But it doesn't always go as smoothly as possible ... To ensure your exit goals are met and your family relationships remain intact, it's important to clarify the family succession process right from the start.