You may plan on retiring at some point, or you may want to work until the last possible moment. Regardless of your hopes for the future, you need someone there to take the reins after you step down.
New York business owners like you may handle business matters via an estate plan. One of the major elements is passing on your business.
Methods of passing your business down
Fit Small Business discusses how to pass your business on to someone else. One of the most common methods is passing it on to an heir, key employee or co-owner.
What works best for you depends on what you want out of the transfer, as well as the size of your business. Small family-owned businesses often go to heirs, as an example. Someone else in your family takes over once you step down. This lets you pass on the legacy of your family business. You can keep quality and operations up to standard. On the other hand, you cannot guarantee you will have a willing heir to take over. Sometimes, there are too many potential heirs and the disputes become messy.
Pros and cons of selling
Selling to the company or an outside party may be a better option, depending on your company. This has the potential to bring in substantial money. It secures professional management, but you relinquish the ability to check on quality yourself. You cannot guarantee that the business will end up in good hands, either. Buyers are often wildcards.
Instead, you may strike up a buy-sell agreement with a co-owner or key employee. This is often an expensive option that can do financial harm to the purchaser. However, on the positive side, the buyer often has a deep personal investment in your business. The buyer also knows the ins and outs of how the company works due to involvement throughout the years.
