{"id":5416,"date":"2010-09-01T15:58:54","date_gmt":"2010-09-01T20:58:54","guid":{"rendered":"https:\/\/bhgrealestateblog.com\/?p=5416"},"modified":"2024-12-30T11:24:44","modified_gmt":"2024-12-30T16:24:44","slug":"succession-planning-part-2-nine-keys-areas-of-focus","status":"publish","type":"post","link":"https:\/\/bhgrecareer.com\/bebetterblog\/succession-planning-part-2-nine-keys-areas-of-focus\/","title":{"rendered":"Succession Planning Part 2: Nine Keys Areas of Focus"},"content":{"rendered":"<p style=\"text-align: justify\"><strong>1. <\/strong><span style=\"text-decoration: underline\"><strong>Include it in your strategic plan<\/strong><\/span><strong>. <\/strong>How many years prior to retirement should there be a plan? Right now is as good a time as any! There is no reason you can\u2019t start preparation now with a series of plans at any point in the life of the business or even before the business even begins.<\/p>\n<p style=\"text-align: justify\"><strong>2. <\/strong><span style=\"text-decoration: underline\"><strong>Obtain the proper valuation of the business<\/strong><\/span><strong>.<\/strong> Because your business succession plan will likely involve selling the business or passing it to your heirs, it is important to know what the appropriate sales price or inheritance value of a business is, so that plans for its purchase for paying estate taxes can be made accordingly.<\/p>\n<p style=\"text-align: justify\"><strong>3. <\/strong><span style=\"text-decoration: underline\"><strong>Take the time to address who will be on the succession team<\/strong><\/span><strong>. <\/strong>This often involves a tough analysis of whether family members (or close friends) have the skill set to run the business, or whether your key succession candidates are non-family\u2013members who may have been working in the business.<\/p>\n<p style=\"text-align: justify\"><strong>4. <\/strong><span style=\"text-decoration: underline\"><strong>Integrate your business succession plan into your estate plan<\/strong><\/span><strong>.<\/strong> Many small business owners think that they can simply leave the business to their spouse or heirs when, in fact, the business comprises virtually all of their net worth. By leaving the business to one person, you\u2019ve excluded all other heirs from inheritance.<\/p>\n<p style=\"text-align: justify\"><strong>5. <\/strong><span style=\"text-decoration: underline\"><strong>Plan for disability<\/strong><\/span><strong>. <\/strong>It is important to incorporate disability planning and insurance into your business succession plan. What is your fall-back plan if you&#8217;re injured and unable to work for four to eight months? Who would run the business? You want to protect your present and future income.<\/p>\n<p style=\"text-align: justify\"><strong>6. <\/strong><span style=\"text-decoration: underline\"><strong>Identify key employees and sales agents who may have concerns with your succession plan.<\/strong><\/span> Ensure key individuals remain with the business during any succession transfer by sharing your plan with them. This helps make certain that everyone involved with the plan is on the same page.<\/p>\n<p style=\"text-align: justify\"><strong>7. <\/strong><span style=\"text-decoration: underline\"><strong>If the business is a \u2018closely held\u2019 business, treat it like a family, rather than as a business involving family.<\/strong><\/span><strong> <\/strong>It\u2019s important when the business is closely held to separate the family dynamic from the business dynamic as much as possible and to recognize that these different dynamics are at work.<\/p>\n<p style=\"text-align: justify\"><strong>8. <\/strong><span style=\"text-decoration: underline\"><strong>Diversify the business owner\u2019s net worth from the business as a whole<\/strong><\/span><strong>. <\/strong>Many business owners hold virtually all of their net worth in their business and find themselves in a difficult situation in a business downturn. After they are gone, their heirs may be forced to sell the business, if the market becomes increasingly depressed.<\/p>\n<p style=\"text-align: justify\"><strong>9. <\/strong><span style=\"text-decoration: underline\"><strong>Plan for contingencies.<\/strong><\/span> If you\u2019ve decided to leave your business to an adult child, what will happen if that adult child cannot assume the role for some unforeseen reason? Though it\u2019s not a scenario any business owner wants to consider, it should be included in your plan. For example, keeping the business within the family by passing it to a son or daughter may allow the surviving spouse to rely on the business for his or her ongoing income. However, unforeseen circumstances may alter the plan, so always have alternative strategies.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. Include it in your strategic plan. How many years prior to retirement should there be a plan? Right now is as good a time as any! There is no reason you can\u2019t start preparation now with a series of plans at any point in the life of the business or even before the business [&hellip;]<\/p>\n","protected":false},"author":181,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[5761,6101,11661,18171,20791,21351,23541,25411,25641,28581,31951,31971,32521,33981,36681,37601,41491,41721,42321,42351,45021],"class_list":["post-5416","post","type-post","status-publish","format-standard","hentry","category-brokerage-operations","tag-brokers","tag-business","tag-disability","tag-heirs","tag-income","tag-insurance","tag-leadership","tag-managers","tag-market","tag-net-worth","tag-planning","tag-plans","tag-preparation","tag-real-estate","tag-retirement","tag-sales","tag-strategy","tag-succession-planning","tag-taxes","tag-team","tag-value"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Succession Planning Part 2: Nine Keys Areas of Focus - Better Homes and Gardens Real Estate Be Better Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bhgrecareer.com\/bebetterblog\/succession-planning-part-2-nine-keys-areas-of-focus\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Succession Planning Part 2: Nine Keys Areas of Focus - Better Homes and Gardens Real Estate Be Better Blog\" \/>\n<meta property=\"og:description\" content=\"1. Include it in your strategic plan. How many years prior to retirement should there be a plan? Right now is as good a time as any! 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