If you died without a business succession plan in place, your business could be brought to its knees and your partners and beneficiaries left with nothing.
Business succession planning is vital for your business
When you own a business, business succession planning is one of the key strategies you can use to exit your business when you retire, or give your business every chance of survival should you become seriously ill or die.
While most business owners regard succession and retirement planning as important, surprisingly, a 2000 Monash University study found that only 12.3 per cent of Australian small-to-medium enterprises had a documented business succession plan in place.
This means that in the event of an owner or partner suffering a critical event such as a heart attack, stroke or fatal accident, the future of 87.7 per cent of SMEs would be uncertain along with financial legacies to family members and other beneficiaries.
Why you need a business succession plan
A business succession plan is a financial and tax plan that will ensure a problem-free hand over of your business should you suffer a traumatic event, disablement or death.
These are just some of the reasons why you need a business succession plan:
- It will give your business a greater chance of survival in the event of your or a partner’s death, critical illness or disablement.
- It will guarantee the true value of your share in the business is paid to you or your family.
- It will ensure the orderly transfer of your business to your remaining partners, family members or key employees.
- It will retain your business for your family, or sell your interest to your partners, key employees or a third party.
Why expert advice really matters
Drawing up business succession plans is complex, especially when there are multiple partners, family trusts or extensive borrowings involved. It is important to structure the plan to avoid unnecessary tax and to set up the right funding mechanisms so that all parties will know where the funds for the buy-out of your share of the business will come from should the unthinkable happen.
As an experienced business owner, insurance advisor and financial planner, Stephen Jones understands the complexities of business and can help you set up a business succession plan tailored to your exact requirements.
If you don’t wish to leave the future to chance and want to know how you can safeguard your business, your assets and your peace of mind with a risk planning strategy tailored to the specific needs of your business, call Stephen Jones today to organise a complimentary, no-obligation and strictly confidential consultation. It may turn out to be the most important meeting of your life.