St. Simons Island Business Succession Planning Attorneys Facilitate Smooth Transitions
A small business succession strategy can maintain your brand and provide retirement income
No one works forever, so you have to plan ahead for what happens when you or another vital member of your business steps aside. At Choate Harris P.C., our attorneys draw on extensive experience to create succession plans that make sense for your business. We provide personalized service, exploring the full range of your options and offering the reliable advice you need to make the best decisions. We help you identify your goals and design a strategy that empowers you to meet them. With a well-crafted business succession plan, you can strengthen your existing brand, retain customer loyalty, and set yourself up for secure income during retirement.
Succession options for small business owners
All businesses must prepare for the day that an owner or operator no longer wishes to continue running the business. Here are a few basic considerations when developing a succession plan:
- How will the business be transferred to new ownership? — Should the successor(s) buy out the owner or wait to receive an interest through a will or trust? Tax implications are an important consideration when deciding how to transfer ownership. So is the issue of retirement income. Should the retiring owner get a lump sum or a regular revenue stream?
- What is the business worth? — A small business is valued based not only on its physical plant, assets, and inventory but also its demonstrated revenues and good will. The latter often depends heavily on the owners and operators whom the customers or clients have come to rely on. A succession plan should provide for an agreed-upon method of valuation.
- Who is going to succeed an owner? — The small business successor may be a family member or a trusted, long-term employee. If the owner wants to keep the business in the family, special care must be taken that the business will be competently managed.
- How long should the transition take? — With a gradual transition, the successor gets to learn the ropes and can turn to the owner for advice when questions arise. Clients get used to the new face of management, which is an aid to preserving the good will value of the business. However, it’s important to define the extent and duration of the outgoing owner’s role.
Of course, every business is unique, so it’s important to discuss your situation with an attorney who is willing to give you the personal attention you need.
Issues for family businesses in Georgia
Special concerns are raised when small business owners wish to leave their interest in their companies to their children. While this is a way of transferring wealth, it can also be a recipe for failure if the offspring are unable or unwilling to assume ownership and management with the same level of dedication as the outgoing owner. A carefully drafted plan can include provisions appointing a successor to a management role while dividing stock ownership. To plan effectively, family members should be involved early in the discussions, along with experienced attorneys and accountants who can help you decide on a structure that is best for the health of the business. Advance planning will also allow sufficient time for a management successor to be trained.
Contact a knowledgeable business succession lawyer on St. Simons Island
Choate Harris P.C. crafts individualized business succession plans for clients throughout the Glynn County area. Please call 912.324.5216 or contact us online to schedule an appointment. Our St. Simons Island office is at 300 Main Street, just off Demere Road.