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Table of Contents
Ten Building Blocks
to Success:
1. Starting a Business
2. Financing a business
3. Company Name
4. Office Equipment
5. Hiring
6. Business Insurance
7. Advertising
8. Efficiency
9. Pension Plans
10. Succession Plans
Checklist
for Success
More Useful Advice:
▪Life Insurance
▪Disability
Insurance
▪Medical
Insurance
▪Long
Term Care
▪Travel
Insurance
▪Dental
Insurance
▪Auto
Insurance
Resources
Helpful Links
Page 1
Helpful
Links Page 2
Helpful Links Page 3
Business
Opportunities:
Jobs, Jobs, Jobs
Home-Based
Business
Opportunities
Virtual Call Center
Job Opportunities
Dental Practices:
Buy, Sell, Valuation
Medical
Practices:
Buy, Sell, Valuation
Businesses
For Sale
Sales Leads
Gifts For Clients
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Step 10: Business Succession
Planning
A successful business will eventually
be sold or transferred to new owners one day. As the owner of your
business you must plan for this event, so that the transition goes
smoothly and according to your wishes. Follow these steps for Succession
Planning.
What if no succession planning is done?
If no planning is prepared in advance then you one of three
events will occur:
(a) Your spouse or heirs will decide
if they want to run or sell the business.
(b) The business goes into your
estate, subject to the rules of your home state.
(c) The business closes. A successful
business vanishes!
To avoid these scenarios do the following ASAP:
(1) Deciding who will be the next owner of your
business.
As your business grows and prospers you must give thought to
the next generation of owners. Possibilities include:
Spouse
Children
Employees
Business Partner
Sale of Business to the highest bidder
One of these will be the owner of
your business someday. However, you must make your choice known
in
advance. Otherwise, there may be family arguments and possibly legal
action by those who "thought" you meant for them to own the business.
This should be part of your business plan AND your retirement planning.
(2) Documentation of your decision.
How you tell the world who the new owners will or should be
can be accomplished in three ways:
(a) A Will naming those who
are to receive the business.
(b) A Trust. The business
ownership can be put into a Trust with succession instructions.
(c) A Buy Sell Agreement. This
is a formal document prepared by an Attorney. Items covered include:
● Names of the current
owners/partners
● How the "exiting" owner's
ownership is to be sold.
● Business Valuation. This is a
formula that can be used at any time to determine the value of the
business. Example: Fives times annual revenue.
● Buy Sell Agreements cover three
scenarios: Death, disability and retirement. An insurance policy
can cover an owner's death or disability. Highly
Recommended: A good source for this insurance
is
our good friends at New England Disability and Life. For a free quote,
their website is:
WWW.NewEnglandDisabilityandLife.Com
The insurance benefit is paid to either the business entity or the
remaining partners and that money
is used to pay for the exiting owner's interest in the business. If the
owner is retiring then the
remaining partners must fund the purchase with cash or a business loan.
(3) Consult a Professional.
Make absolutely sure your wishes for succession are prepared
legally. Consult BOTH a Tax Attorney and a CPA. They can help you create
an estate plan so that you can leave behind a lasting legacy.
(4) The people who are to take ownership should be
make aware of you decision.
If they are NOT involved in the formal documentation (the
will, trust or buy sell agreement) make them aware and tell them who has
the documentation (usually at the attorney's office). Do NOT keep it a
secret!
Congratulations! You've learned how to open and
operate a business. You should now go to the page of this website that
has a Checklist of all Ten Steps and keep it handy.
The checklist.
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New
This week:
Jobs,
Jobs, Jobs
Virtual Call
Center Jobs
Dental Practices:
Buy, Sell, Valuation
Medical Practices:
Buy, Sell, Valuation
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