Family-run business owners have to make sure that they have a plan for what’s going to happen with the company if they pass away. Part of this has to do with the estate plan that they set up. Having everything in order with their personal estate plan can help to provide for their family members, which may make it easier for the business’ staff to focus on running the company.
It is important to get your plan in place as soon as possible so that you know that your company and family are taken care of if something happens to you. Some individuals think that they have plenty of time to get this done, but the truth is that you never know what’s going to come.
Set the succession plan
Family-run businesses are often smaller and depend heavily on the owners to handle the day-to-day decisions for the company. This puts everyone in a precarious position if something happens to you and you don’t have a plan in place for handling the transition to a new person who will run the company. The succession plan sets this up so that everyone knows exactly what they need to do.
Once you set the succession plan, you need to ensure that you prepare the individual or individuals who are going to take your place. Your time to train them about what they need to do is now, while you’re still able to handle the task. Make sure they have the chance to build business relationships alongside of you so that they have those in place when they need to utilize them.
Plan for the finances
Your loved ones are going to need to be financially supported after your death. You have to set the standard. You might use a life insurance policy for part of this, but you also need to think long term. You need to plan for the business’ financial success during the transition period. Setting up the financial plan with the company so that it will support your family can also help everyone to feel more secure.
There are various options to do this so make sure you speak with someone knowledgeable about this matter and find out what options will help you reach your goals. Just make sure that you don’t wait too long. The last thing your loved ones need is to try to struggle through running the business without you while they’re trying to cope with losing you.