Business Planning

Have you thought about your company's future after you're gone?

Business succession is one of the most neglected areas of planning for business owners. In its most basic form, a succession plan provides a road map for your partners, heirs and successors in the event of your death, disability or retirement. Your plan can include:

• The distribution of business stock and other assets.
• Debt retirement schedules.
• Life and disability insurance policies.
• Buy-sell agreements between partners and heirs.
• The division of responsibilities among successors.
• Determination of the value of the business.

Further, your personal and professional goals are determining factors. Some important questions you need to answer are:

• Is there someone capable of running the business once you've stepped down?
• How much control of the business do you want to maintain?
• Are there key employees you want to retain?
• Are there sufficient assets to pay the estate tax, equalize the estate and keep the business?
• How much money do you need to reach your financial goals?

Additional issues that must be discussed within business planning include the operations, risk management and executive compensations structures for the organization. This can include topics such as:

• Making sure there are proper financial controls in place with regard to the flow of accounts receivable within the organization
• Determining what type of legal structure the organization might form for different situations
• What types of retirement plans should be put into place for retention of employees
• How to create golden handcuffs for certain "key employees"
• Dealing with the rising costs of health insurance