Succession Planning Considerations

Whether a family business is big or small, succession planning is important to avoid family feuding or damage to the business. Here are some tips for avoiding mistakes in succession planning:

• With only half of family businesses having a succession plan and only a third surviving the death of the business, start succession planning sooner rather than later.
• Careful consideration of future management and leadership can be aided by bringing in outside advisors and considering not only family members but current employees outside of the family.
• Have an appraisal done to get an accurate and emotion free assessment of the business' value.
• Make succession planning an open dialogue with all involved, including potential successors and family members.
• Don't forget to include tax consequences in succession planning to avoid business assets having to be sold to cover taxes after the founder dies.

See John D. Colucci, 5 Mistakes To Avoid When Creating A Business Succession Plan, Mondaq, Apr. 1, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.