Businesses as well as farms often go from generation to generation.
Dynamics are often confusing and turbulent.
Many businesses and farms are in a constantly changing environment.
Everybody is busy and seems to find it hard to work on the succession plan.
The SMOKY RIVER CHAMBER OF COMMERCE want to help local businesses and farms with this.
Why plan succession?
Do we need to plan and how long before the retirement date of the senior owner?
Planning makes a lot of sense in keeping all involved parties positive on the process and take away uncertainties.
The seniors want to know when they can retire and how the retirement is going to get funded.
The juniors want to get going and have all new plans for the business they want to roll out.
The siblings that are not involved in the business/farm, wonder where all the assets go. What is their share of the business?
This is a short snapshot on WHY planning does make a lot of sense.
For farms in our area a lot of land is going to get bought up by big investment companies and will not be available for family run businesses anymore. This can affect the development of family farms in the generations to come.
How do we plan succession?
Succession planning is not just handing the business over to the next generation.
There are lots of hoops to jump. Are we dealing with family members, close or far removed? Is there a tax liability on the business? Is the business/farm incorporated and is the structure flexible enough to look after all the involve parties to be successful. Maybe a partnership works better. Do we need to do an estate freeze?
All these questions need to be answered. This takes time and effort.
Informing all involved parties and taking time to comprehend it all is very important.
When all know what the process is and support it, the execution will be so much easier.
When should one start this planning?
As soon as it is clear that someone is going to take over the business. Or, as soon as the business owner decided on a time of retirement.
Time goes by fast and we do not want to get caught running out of time.
A big consideration in this is the financing of the retiring partner. Also, the viability of the business after is an important factor.
Tax liability is a big part in the timing. Available assets in the business is also critical for the timing.
Tax rules have changed and what was good 5 years ago may not be good anymore at this moment.
So, having the plan in place and then waiting for the right timing to execute can be a good strategy.
Where can we get information on this important process?
We can look at consultants around us to help setting up the structure to have it all run smoothly.
Accountants, lawyers, financial advisors, insurance advisors and banks often offer good input on this.
Businesses are happy to run seminars to inform you on the way to do it and which one of their products work best in this process.
All this information is very valuable. By attending more different sessions, comprehension of the whole process will be much clearer to everybody.
The SMOKY RIVER CHAMBER OF COMMERCE is going to gather information and invite experts to help us get a grip on this process.
November 29th is the planned date to do this in Falher.
People are invited to connect with the SMOKY RIVER CHAMBER OF COMMERCE if they want to keep informed on this. The Chamber will also communicate via newspaper and internet on the planning of this event.
If this is a successful event the Chamber is happy to dig further in this matter and have an ongoing partnership with he local businesses and experts to make our local business/farm community stronger and ready for the future. For more information please call 587-647-0134