Calling all Trailblazers:
Aug 06, 2015
Thinking of leaving your business? Some tips for will planning from Canada Business Network Government of Canada.
If you intend to retire or exit from your business start planning early. It can take up to 5 years. A business succession plan can help you make decisions on ownership, maximising the company's value and tax strategies.
Some of the following areas should be considered:
Goals and objectives
Develop a vision for the business. Determine your retirement or post business ownership goals.
If appropriate, involve family members in the development of the plan.
Have a conflict resolution mechanism — a pre-established plan to resolve any conflicts between family members, partners and/or employees.
Select a successor.
Identify the core skills and competencies that your successor will need.
Plan for training of the new owner(s).
Prepare a financial plan and determine the tax implications of the transition of your business.
Have a contingency plan that includes the financial resources required to ensure the survival of your business in case of illness, accidents and even death.
Corporate structure and transfer methods
Determine your options as a sole proprietor, partner or owner of a corporation.
Decide whether you wish to transfer or sell the business to your successor.
Find out the fair market value of your business.
Establish a timeline for easing your way out of the business.
Implementation and follow up
Review and update your plan regularly.
It is a good idea to contact key advisors such as accountants, bankers and lawyers when developing your succession plan. Communication with your successor(s) is important in order for them to understand their roles in the business and to allow them to collaborate with you throughout the transition process.
It is important to ensure that the strategy fits your personal and business goals. There are many options to consider. For instance you could transfer the business to a family member or to a partner, management team or employees or sell to a third party.
For further information on all aspects of succession planning and the resources available go to Government of Canada - succession planning Canada Business Network