For many years, you’ve been the captain of your ship. Running your own business hasn’t been easy and success was never guaranteed. Retirement planning is the next uncharted water for you, and there’s no one-size-fits-all map. Ultimately, when you own your own business, you must create your unique retirement strategy. This means setting up a succession plan for your business, and a retirement income plan for yourself. This starts with figuring out the who, what, and when of your business succession plan.
Now is the time to identify successors and their successors. Name both managers and owners of the business, and codify their roles in writing, active or non-active, for all family members. And, if there’s additional support required for the successor from family members, then be sure to include that as well.
What Will They Be Doing?
This is where the governance processes will be created in terms of how family members are included. You may want to create a method for resolving disputes if needed. You’ll also want to list out the roles and their responsibilities. Developing a vision and outlining goals and objectives for the future with everyone on the same page is key. You want the next generation of management to closely align with business goals, as well as have a better understanding of their personal wishes.
When Will it Happen?
You should try and establish a timeline for the implementation of the overall succession plan. If the business is going to be purchased, you may need to look into financing options, either from an external party or self-financed on a deferred payout basis from the retiring owner. A proper valuation of your business and a detailed succession plan will help save you and your family (or business partners) time, money, and ultimately preserve the continued success of your business. Think about when you want to retire and start as early as a few years before, as this process can take longer than you might expect. You may also opt to slowly transition out of your leadership role to give your successor ample opportunity to transition into their role.
We can help you map out your unique retirement plan and consider all of the elements that will go into it, from valuating your business to passing the torch to a new owner. Click here to schedule a time to meet with us so we can learn about your unique situation, business, and retirement goals.