Family Businesses At Risk

Most family businesses do not have a formal succession plan, and may not make it to the next generation. CIBC offers some tips to deal with the problem.

A survey released by CIBC on Oct.15 shows that 80% of business owners who say they have a succession plan admit that they are informal at best. Even though they plan to sell their companies to fund their retirement, they are relying on “back-of-the-cocktail napkin ideas” when it comes to succession planning, says CIBC.

The bank warns that business owners who lack proper plans may not be able to realize the full value for their business and could face taxes that will reduce the size of their anticipated retirement savings.

“We see it all the time, where a business owner fields an unexpected offer and misses out on the opportunity of selling the business for top dollar just because he or she isn’t prepared,” comments Sean Foran, managing director of business transition planning, wealth advisory services, at CIBC. He also warns that failing to involve family members in the planning process can also lead to problems, either because the next generation may have a different management style, or may simply be uninterested in taking over the family concern.

Foran provides a list of things for business owners to consider when making their succession plans:

• Define the short and long term objectives of all stakeholders – family, employees, business partners and shareholders – in your plan so you can objectively consider succession.
• These could be financial or managerial resources.
• Consider the future leadership needs of your business and adequately prepare a willing and capable successor. This could be a member of your family, a business partner or a third party.
• Update the succession plan as your business grows and changes to reflect both your personal and business objectives.
• Assess your lifestyle and income requirements in retirement. The transfer of your business should be reflected in your overall tax and estate planning.

You are assured that it viagra from canada is free from side effects. People link sex together with leisure time, but that’s not the only benefit viagra effects women of sex. Therefore get on your guard tadalafil shop and proceed solely once you get a inexperienced signal from the doctor. Some people are introvert; they suffer more than the prescribed does, or have a word with your doctor who would recommend super cheap cialis the friendly psychologist to help you out of your problem.
“Business owners invest a lot of time and energy into making their business a success, but when it comes to transitioning the business, they lack a clearly-defined exit strategy,” he says.