People's United Bank Senior Vice President of Wealth Management Russell Caffry explains business succession planning and why you might want to start this type of planning for your small business.
What do you mean by "business succession planning?"
Vermont is a state of small businesses, most of them owned by local people. Everybody will retire or die some day so it's important to plan for a transition of ownership. This might mean a sale of the business to another company or finding a way to keep it in the family, or even selling it to their employees. There are pros and cons to each of these options so it's important to consider these choices carefully, with the help of qualified professional advisors.
What do you see as the biggest impediment to this sort of planning?
I think it's time. Many small business owners are so busy running their business day to day that they don't make the time for the sort of long range planning that business succession often requires. Another thing that can hold back this process is that it often involves the owner releasing some degree of control over their business and some owners find that very difficult.
Who can business owners go to for help?
They can go to their bankers, of course. And also their CPA, attorney, or financial advisor. In addition, there are firms that specialize in business transition and valuations as well as business brokers that can help an owner to sell the company.
What advice would you give small business owners?
Even if you plan to own your company for years to come, planning for a smooth transition now can help ensure that your vision for the future ownership of your company comes true and will better enable them to enjoy the fruits of their hard work. If they don't do this well, what the owner worked so hard to build may not survive.
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