When should I consider developing a business succession plan?
Minneapolis attorney Sally Grossman discusses that a business owner should immediately consider developing a business succession plan.
Email: [email protected]
Phone: (612) 632-3007
I think you should consider developing a business succession plan as early as possible. You know those financial planners that tell you that you were supposed to start saving college when the baby was born and nobody does it. That doesn’t mean it’s bad advice. Most people don’t have the money when they first start a business to do the full business succession plan. And, frankly, they don’t know where the business is going. So, it’s not realistic to say do the whole thing up front. But if there’s going to be another owner at a bare minimum, you ought to, at least, get a Buy/Sell Agreement or a Shareholder Control Agreement. And, then as time goes on, there are steps you can take along the way toward having a full business succession plan. So, for example, you could get some key person insurance. You could recapitalize, so that if you ever want to gift voting and non-voting common stock to different kids, you could do that. So, there’s steps you can take along the way. I would say, the earlier the better. And, the only time it’s too late is probably after you’re gone.