• Further financial, taxation, and legal considerations • Procedures to resolve disputes that may arise • A schedule of succession Keeping it in the family Many dealerships are family-run businesses, with the expectation that the business will be passed on to the next generation. If you’re planning on leaving your business to your spouse, children, or other relative, it’s important to do it correctly. If a business owner fails to properly plan for succession within the family, it could lead to many disputes down the road - ultimately dividing and leading to infighting between your family members. In order to involve your family members in the decision of choosing a successor and to ensure that your business will live to see another generation, you can create a Family Participation Plan. This step is common when planning for succession within your family, and addresses issues like what prerequisites or experience is needed for new owner candidates, how performances will be appraised, what happens to business shares, and what happens in the event that a family member does not work out as an employee. When should you start planning? The experts say that you should start planning today, even if only on an informal basis. “Anybody could be hit by a bus tomorrow” says John Alexander, CFP, and Senior Financial Planner of North Bay’s Assante Wealth Management - “If something happens to you and you don’t have a plan, your business could be left in limbo. With nobody to take the reins, key business decisions tend to be put on the backburner.”
process of succession planning. It’s recommended that business owners start planning formally within five to six years of their expected retirement date. The process can take anywhere from six to eight months on average because of all the parties and key decision making processes involved, so it’s important to be proactive about your plan. When your plan is in place Once your plan of succession has been drawn up and made official by all parties, you can start the process of training the future owner(s) of your company. A well-trained successor will mean that the employees and clients who rely on your business will be able to continue living comfortably, and your business will continue on with your vision in mind.
“If something happens to you and you don’t have a plan, your business could be left in limbo."
Even more important than the proper training of your successor is ensuring that your retirement or exit from the business will go smoothly. Once your plan is in place you can then focus on the planning of your retirement
and estate with tax implications and financials in mind. Since your dealership will be left to the best possible successor, you can have that peace of mind and focus on the next exciting stage of your life. What you stand to gain by planning for succession First and foremost, what you stand to gain by being proactive in succession planning is peace of mind - your legacy will be left intact and the people who rely on you and your business will not be left in the shadows. Since you get to select and groom your own successor, you will have a direct say in the future of the business you fought so hard to keep alive. With your retirement in mind, preparing for succession well ahead of time will mean that you get the most value out of your business, and can maximize the amount you stand to gain upon exiting. With taxation and the legal precautions taken and considered by you and your successor, the future will look bright for all parties. It’s never too early to start thinking about the future, especially when there’s so much at stake. The legacy of yourself and your business, and the livelihood of your family and employees are depending on a smooth transition of power upon your exit from the business. Speak to your family, your employees, and the person(s) you plan on leaving in charge of your business today.
Discussing the terms of your succession often and openly with those who you want to pass the business to will leave all parties ready for the actual
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