As a business owner, one of the most important things you can do is figure out your succession plan early. In fact, it should be among the first things that you establish at the start.
To do this, you need to know what options are available to you. This way, you can decide which suits your unique needs the best.
Keeping it in the family
The Small Business Administration takes a look at potential options for business succession plans. There are many ways to pass down the business. The first is through family inheritance. If you have a relative who is willing to take on the business, you have less to worry about than most. You can pass it down as a gift, so you do not have to worry about purchase arrangements. Note that you may hold responsibility for gift taxes, though.
Next, you can choose to sell the business to a familiar figure. In this case, it may be a co-owner or a key employee. You may even sell your share back to the company itself. The biggest benefit here is that you know who is taking over. However, you cannot guarantee these people will want the responsibility or the fiscal burden.
You can also sell to a stranger. This can include an individual buyer or another company. On the plus side, you have more room for negotiating price points. On the down side, you may know nothing at all about the person or people who will own your business.
You must compare the pros and cons yourself and decide from there what suits your situation the best.