Succession Planning–Financial Strategies
January 4, 2018 by Jeff Farrington, MSM
At some point in our careers, each of us must begin planning for that day we step away and hand over the reins. For business owners, it’s not as simple as just choosing a date, accepting the gold watch and moving on. When determining how your business succession will proceed, selling your business should be at the top of the decision tree.
Many people look internally for a buyer. Depending on the situation, selling to a current employee or group of employees can provide them with an incentive to stay and to excel. It can also leave you feeling confident that your company and your philosophy will live on in the people you brought on board, trained and mentored. You may want to transition partial ownership while you’re still running the company, or have it set up to transition upon retirement.
If you don’t have an internal candidate, the same can be done with buyer candidates outside of your organization. In this case, however, you don’t get the benefit of handing off the firm to someone you’ve been working with for a long time, which increases risk if the buyout is based on future performance. Likewise, it’s harder to line up a long-term solution in this method. When making the choice to sell your business interest keep in mind that you may have to pay a capital gains tax if you sell prior to your death.
At Gordon Advisors, we have the depth of experience and knowledge necessary to help you take all the right steps in the right order. No matter your circumstances or plans, our experts will work by your side to counsel and guide you through the sale of your business. Contact us to learn more.