A family business is not only a significant source of income. It is also an asset that can continue to generate wealth for future generations. Florida business owners can take advantage of succession planning to ensure that their companies are able to be transferred to their heirs. A well-planned succession is an important part of guarding and accumulating generational wealth.
Statistics show that owners of a family business are not always prepared to begin the succession process. Only 30 percent of family businesses are successfully passed on to the next generation. Seventy-three percent of business owners have no succession plans in place for their business. Eighty-four percent of family business owners do not want to give up the business.
A well-planned succession is essential for a variety of reasons. It can help guarantee the transferability of a business while its value is maintained. It forces owners to honestly evaluate the strengths of the business and the areas that require improvement. Stakeholders are obligated to address issues such as leadership and management and plan for an avenue of operation in case an unexpected event occurs, such as the death or incapacity of the owner. Succession planning can also be coordinated with shareholder, estate and financial planning to protect the family wealth.
Owners of family businesses may want to consult with an estate planning attorney. Legal counsel may assist them with initiating the succession process. In carefully planned stages, certain strategies, such as identifying possible successors, establishing the basis for future growth and planning for necessary acquisitions, may be implemented to ensure the company’s continued financial viability.