What can I do to make sure that my small business will meet the needs of the generation to come?
Many family business owners hope to pass the business on to the next generation when they are ready to retire, however, the sad reality is that less than a third of these businesses are able to do so successfully. For those who do, only half will still be in business long enough to pass it down to a third generation.
On an average day in the U.S., 40% of businesses are working to change ownership due to the owner retiring, or due to their own desire to stop operating the company. As many who have participated in a Colorado Springs business formation in the past understand, passing down a business is a very complicated process, and many business owners don’t know how to effectively manage the transition.
Due to the difficult nature of switching business ownership, many are looking for the best course of action to take when they are ready to retire. Business owners typically do one of the following when they want to retire:
There can be many circumstances that lead to owners failing to successfully transition a business to either a new owner or a family member. Some of the most common ones are not having a viable business strategy, lack of motivation or energy to change the business, or lack of interest on the part of the next generation in running it.
Even for those who do have interest from younger generations in running the business, it’s crucial to have a solid business strategy in place. This strategy determines how the business will run and ultimately, how the transfer of ownership will take place. Allowing The Shafer Group to advise you on succession planning before you are ready to retire will make it much easier when the time comes, and will increase your chances for success.
There are so many businesses out there that fail due to poor planning. Let The Shafer Group assist you with important advice on how to manage your family business, including managing Colorado Springs LLC tax and the Colorado Springs partnership tax. We can help you to devise a strategy that will strengthen your existing business and make it as strong as possible before transferring ownership. By having a clear understanding about everything it takes to transfer ownership of a business, including tax regulations and how to keep the business running smoothly after you retire, you will have a better chance at successfully passing on your family business to the next generation.