New York business owners like you want to ensure your business stays strong after you pass it on. Because of that, you should be putting time and effort into crafting a good succession plan.
You can include this in your estate plan. It is the place to address matters like business succession and transfer.
The best ways to transfer
Fit Small Business looks at different methods of transferring your business. This can essentially divide up into transferring ownership to familiar versus unfamiliar persons. For example, transferring to an heir is one option. This is most popular in family-owned businesses that get passed down through generations. This removes many complexities involved in having to sell to outside parties. But there is no way to guarantee your family members will want to take on the business. In some cases, multiple family members may want to inherit the business. This can cause messy in-fighting.
Deciding to sell your business
Other options involve selling. You can sell your business to another company, or even sell your share back to the company itself. This is a solid financial decision. But it leaves you with very little say over who becomes the next business owner. This creates an atmosphere of unease. After all, you have no real way of getting to know the character of the buyer. They could take your company in a direction you do not want.
Finally, you can strike up a buy-sell agreement with a key employee or co-owner. This is sometimes a difficult financial move to make. It puts a big cost burden on the person or people buying the business. On the plus side, you know they have a vested interest in the company. They also have experience working within it, so they are often more trustworthy candidates.