While many business owners hope to see family members take over the business when they are ready to retire, this unfortunately doesn't always lead to the advanced planning that is required to make this vision a reality.
It's not difficult to understand why - business owners tend to delay succession planning since running and growing their business is their priority. However, a big part of a growing a business is ensuring you have a framework for its stability and success in the years to come. Every business should have a succession plan!
The transition of a business can take several years and should include identifying your successor, setting timelines and assessing your business and personal needs.
There are also six key questions every business owner should be able to answer to ensure their business is structured in line with their goals.
Have you considered your exit options?
Do you know what your business is worth?
How do you own your business?
What planning have you done in relation to the transition of your business?
What does your retirement look like?
What happens if there is an unexpected tragedy?
Assembling an advisory team of experts to help you is another critical step in ensuring a smooth transition and strong future for your family business.
Prashant Patel, Vice President, High Net Worth Planning Services, RBC Wealth Management
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