As a business owner, you expect your business not only to support your family but to fund your retirement. Those who get the most out of their business upon retirement, are those who prepare a succession plan that is in line with their business’ strategy. This is always driven by the goals of the business owner and is revisited over time.
But what is a succession plan, you might ask?
At a high level, a succession plan captures the steps needed to move a business to new ownership. All too often, business owners get caught up in the concerns of tax and the technical steps of transition rather than outlining their ultimate goals. A succession plan starts with the who, what, and why. The technical “how” becomes more evident once those questions are answered and is guided by professional advisors such as accountants and lawyers.
In order to have a successful succession plan (pun intended), the key is to provide yourself with enough time to plan and let the plan work. Time buys opportunity. By planning early, you leave yourself with more opportunities to: access strategies for sizable tax savings; find the right person to transition the business to; and generate cash to pay those exiting the business. A good rule of thumb is to start planning your exit from your business five years before you want to retire. However, younger business owners should also consider structuring their business for both success today and in the future.
With baby boomers now in their late 50’s to early 70’s, the time to plan is now! The influx of baby boomers looking to exit the Canadian workforce in the near future will trigger a surge of business transitions as they look to pass the torch. These transitions are affected not only by tax regulations but also family relationships which need to be handled carefully over time. Succession planning not only benefits you financially but provides you with peace of mind that your business legacy will continue!
Due to the importance and complexity of this topic, RLB has written a blog series on how you can set your business up for a successful succession. This series will discuss who should have a succession plan, reasons to plan, when and where planning should start, as well as the options available to create an effective plan. It will discuss topics relevant for those ready to start planning their business’ transition, those interested in capitalizing on the retirement of the baby boomers and those with a young business looking to support themself and their family.
Want to check out our Succession blog series?
Succession Part I: Should you have a succession plan? | RLB LLP
Part I of our succession blog series asks the question “Should you have a succession plan?” Read our blog to get your answers about succession planning!
Succession Part II: Why bother planning? | RLB LLP
Business owners often ask: Why bother planning for succession? Read Part II of RLB’s succession planning blog series to find out!
Succession Part III: When should I start planning? | RLB LLP
Check out Part II of RLB’s succession planning blog series to find answers to the question of: When should I start planning?
Succession Part IV: Where should I start? | RLB LLP
Check out Part IV of RLB’s succession planning blog series to find answers to the question of: Where should I start?
Succession: What are my options?
Business owners work for years to build up a business that they are proud only to come to the grim realization that they will be walking away from it all upon retirement.
Succession: Are you a budding entrepreneur or someone still growing his/her business?
Want to be your own boss? If you are a budding entrepreneur, already own a small business or are looking to purchase a business, this blog post is for you!
