It took determination to get you where you are today: a successful owner of a small business. But now after all these years you are ready to step down and start the next chapter of your life. However, you don’t have a succession plan, and you don’t want to see your business dissolve after you have devoted your entire life to it.

So, what comes next?

Making a succession plan is critical for any small business owner. And, you shouldn’t wait until you are ready for your last day of work. After all, what happens in the event of your untimely death? Will your successors, partners, or heirs know what to do with your company?

Because a succession plan acts as a road map, it gives those close to you in your business and in your family a guide to the following:

  • Distribution of assets
  • Distribution of stocks
  • Debt retirement schedules
  • Buy-sell agreements
  • Division of responsibilities among successors
  • Life insurance policies 
  • And more

Starting Succession Planning

Now that you understand how important it is to have a succession plan in place, you may need to know how to develop one. The first goal in succession planning is to establish your goals. You will need to ask yourself some hard questions including:

  • Do you have someone in mind to run the business once you step down?
  • Is that person sufficiently qualified, or do you need to start training him or her?
  • How much of a stake in the company would you want that person to acquire?
  • Are there vital employees you want to see retained?
  • What percentage of control do you want to keep? 
  • How much money do you need to make?
  • Is there enough money to pay the estate tax and keep the business running? 

By asking yourself these questions, you will be able to clarify your goals with your business partner, employees, successor, family, and heirs. Although you may be able to communicate with those around you about your vision and goals for the next phase of your life, you need to have your succession plan in writing. Additionally, you need to have a good understanding of the federal estate tax laws.

This is why engaging a skilled Austin business attorney for your Texas business succession planning needs is critical. For help completing a succession plan, or to learn more about the importance of creating one, please call the Posey Law Firm today. You can speak with a skilled Texas business lawyer in a complimentary consultation by calling toll-free at 888.269.1962 or locally at 512-646-0828 today.