When a successful business person with no business succession plan becomes incapacitated or dies, the business typically rests in the hands of family members who may have no idea of the business or its operation. Often the family is ill prepared for running the business or selling it as an asset.
This usually destroys a business. Such lack of planning is not fair to the owner’s family, the business that has operated for many years, and the lives of the employees and others who depend on the viability of the business. Business interruption can lead to loss of business value or loss of the business itself resulting in much less return or no return on the business for the family and loss of jobs for employees. The lives of everyone directly or indirectly related to the business are left upside down.
A business succession plan allows the owner of the business to predetermine the purchaser for the business, the method of valuing the business and the method of payment, so everyone involved knows exactly what will happen should an event requiring succession occur. Such a plan will direct for an orderly sale of the business and transfer into capable hands resulting in the receipt of full value for the business, the preservation of that business and its customers, as well as retaining jobs for valued employees.
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