The success of your company relies on how you manage it and how you lead the business into the future.
Of course, as a good business owner, you also want to consider what will happen to the business in the event that you can no longer drive it forward.
Set up a buy-sell agreement
Fidelity discusses important things to know about business succession plans. There are numerous options available when it comes to choosing what to do with a business, and they do not all involve leaving the business for a family member to inherit.
First, you can set up a buy-sell agreement. This works if you have co-owners of the business. They can simply buy your share and carry the business forward in the same way that you were proceeding before.
Choose ownership transfer
Of course, you could choose ownership transfer instead. You can choose your successor through various means. Some will choose a family member, while others might want to go for someone who has worked for the company for a long time. This is up to individual preference.
Pick your management succession
Relatedly, management succession is just as important. Planning might include the retention of key employees, delegation of certain responsibilities and the training of potential successors.
Finally, always remember to consider taxes. Consider establishing something like a grantor-retained annuity trust (GRT) in order to keep the tax burden as light as possible for successors. Things like this help prevent business appreciation from getting taxed and can save any successors a lot of time and money.