When I meet with business owners and ask the question, “When do you plan on exiting your business?” the answer is always the same: “I am going to retire in five years.”
Succession plans should be implemented when the business owners are relatively satisfied that the business is running smoothly. If the planning begins because of a problem that has surfaced, the outcome may be nowhere near what you expected. Two types of buy-sell contracts used for two or more owners are the following: a cross-purchase agreement and an entity-purchase agreement.
The International Business Brokers Association is the largest nonprofit association operating exclusively for people and firms engaged in business brokerage and mergers and acquisitions. Their website, ibba.org, features a tool to help sellers identify IBBA brokers in their area.Transferring a business to a family member takes careful planning. There will be sensitive topics to discuss based on your family’s dynamics.