Many business owners support their families through their businesses. If something were to happen to you, such as a sudden death or permanent incapacitation, it may affect both your business and the lifestyles of the people who rely on you.
Here are three things you should consider when planning for the future success of your business and your family:
Keep Ownership Agreements up to Date
- Many owners create ownership agreements early in the business’ life. As your business has evolved, those agreements may have fallen out of date. The most common type of ownership agreement that doesn’t evolve with the business is a Buy-Sell Agreement. Having an outdated Buy-Sell Agreement can be worse than having no agreement at all.
Separate Fairness and Equality
- If you have children, planning for future success becomes more complex.
Have a Backup Plan
- It’s important to have a backup plan when planning for a successful future. The surest way to do so is to install Value Drivers in your business. Regardless of whom you want your successor to be, all potential buyers/recipients of ownership will want Value Drivers to be present in the business.
- Another way is to determine whether your chosen successor can continue to grow the business. Implementing strong incentive plans is a way for you to determine this and reward high-performing potential successors.
You have so worked hard to grow and run your business. You deserve to exist on your own terms and achieve all of your goals while protecting everyone involved. Our members exit their businesses on their own terms and timeline and make their next phase of life the most fulfilling and best yet. Let us show you how!
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Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.