As a business owner in Florida, you should prioritize business succession planning. This is a primary area of focus in estate planning. You might want to retire at some point in life, or you may want to work until you no longer can. Whatever the case, you need to have succession plans set far in advance.
There are some common methods of transferring business ownership. Depending on what you are looking for, some may benefit you more than others.
Ways to transfer your business
Fits Small Business examines methods of passing ownership of your business on. Some of them include passing your business on through:
- An heir
- A co-owner
- A key employee
- The company
- An outside party
Pros and cons of methods of business transfer
Each option has benefits and drawbacks. For example, an heir takes away a lot of the uncertainty that comes with other options. You know the heir on a personal level. You likely have a good gauge on their work ethic. You can talk to them openly about what you want from the business in the future. On the other hand, personal connections can make inheritance a messy affair. This is especially true if multiple family members have interest in taking over.
Co-owners and key employees offer a similar sort of predictability. They know how the company works from the inside. Over years, you have established a relationship of trust with them. You know your choice is reliable and will steer the company well. But a buy-sell agreement is often a financial difficulty for the person buying.
Finally, selling to the company or an outside party removes personal financial concerns. But it has the biggest element of the unknown. You do not know the true character of who buys your business, which can create issues in the business’ future.