Evaluate Your Succession Plan

December 28, 2017 by Hannah Thoms, CPA, M.S.F., CFP

Starting and running a successful business takes plenty of time, energy, and elbow grease; but retiring from a business, some might say, is even harder. In the United States today, an unprecedented number of baby boom small business owners are starting to realize that. In fact, baby boomers own 12 million small businesses in the United States (classified as under $20 million in revenue), more than 70 percent of which are projected to change hands in the next 10 years.

At Gordon Advisors we counsel small business owners on a variety of financial matters, but few are as important or as misunderstood as business succession planning. To help solve this dilemma, we have created several tools to enable business owners to understand the steps and strategies involved in business succession, know the many details involved and evaluate their plan along the way.

The first tool is Anatomy of a Succession Plan written by our Chief Operating Officer Jeff Farrington, MSM, and Principal Hannah Thoms, CPA, MSF, CFP®. These skilled and knowledgeable professionals have decades of expertise working with small business owners and compiled this handy guide to answer your questions and get you on the right path.

For businesses considering leaving their company to a family member or close employee, we created our Succession Planning Score Card. This tool can help you get a better idea of which people may be suitable choices to succeed you, assess your and your company’s financial situation, define family involvement in the business, and other relevant planning aspects. By simply scoring in each of 10 categories with seven levels of completeness, the Score Card serves as an evaluation tool, providing a picture of where you are and where you need to be.

Another great tool is A Business Succession Planner worksheet, an in-depth questionnaire to help you define your business, competition, family involvement, finances, and much, much, more. Each question you answer is a valuable piece of the puzzle that, once solved, will define your company and your succession intentions as you proceed through the process. As an evaluation tool, the planner shows you what you don’t yet know, but need to find out to complete your succession plan.

Together, these three business succession tools provide you the means of beginning the succession planning process with a level of knowledge and confidence and to evaluate your progress toward your end goal. The tools will also help you understand which taxes will be owed under different scenarios and to look out for estate planning complications before they occur.

Isn’t it time you took a look at succession planning for your small business? Download our free planning tools and learn what you need to know today!