3. Make a plan
There are several common types of business succession plans that businesses frequently put into place, such as:
- Selling the business to a co-worker
- Passing on business to an heir
- Selling to a key employee
- Selling to an outside party
- Selling shares back to your company
All require careful execution to make it clear what the plan is, reduce any potential disputes between parties, ensure that the terms and conditions of a potential sale are clearly outlined, and relieve some of the stress for the departing owner’s family.
Further, there are additional options available to minimize the financial burden on family, such as employee stock ownership plans or certain life insurance policies. These should all be addressed when considering the magnitude of options available to a departing owner.