Categorized | Business

Entrepreneur

Who Are You Going to Turn the Keys Over to?

By Tom Irmen

More than half of America’s nearly 30 million small business owners are within a decade or so of retirement. So who’s going to succeed you when you retire? Or maybe it’s your plan to work right up to the end? Regardless of your plans, you might discover that future events could interfere with even your best intentions.


What if you were to die unexpectedly? What if you are incapacitated and unable to make those same decisions in the future that you make today? What if your children pursue their own dreams that don’t include operating the family business?

Less than one-quarter of today’s small businesses have succession plans. If tragedy were to strike, it would be like dying without a will. In other words, someone else will be making decisions in the future on your behalf… decisions that you might not agree with.


It can get even more complicated than that. What if your son or daughter that takes over your business decides to divorce their spouse? You know, the one you were never quite fond of. Will the divorce settlement include surrendering half of your business to their ex?


Life doesn’t always go exactly as we might have hoped. If you and your spouse are counting on retirement income from your business when you’ve turned over the keys to your small business to your successor(s), your only assurance of continuity will be a well-thought out and carefully implemented succession plan. Probably the best place to start in succession planning is to meet with your family to discuss your future plans and expectations. Next, schedule a meeting with an attorney experienced in small business succession planning. Finally, incorporate your intentions into a final document that describes your future plans in detail.

It’s also a good idea to meet with those family members involved and key employees to review your succession plans in order to eliminate any surprises that might be potentially disruptive in the future. Your objective should be to map out as smooth a transition as possible in order to protect not only the business that you’ve invested your life in, but also to protect the livelihoods and futures of all of your associates who have contributed to your small business success.

Leave a Reply