Experienced Harrisburg Accountants Advise Business Owners on Succession Planning
Personally tailored plans for a smooth transition that maintains company value
If you own a small business, especially one you built from the ground up, you probably want it to continue operating even after you’ve stepped away. In fact, it might be the greatest legacy you can leave to your children. But what would happen if you suddenly decided to pass the reins to the next generation? At Breon & Associates, we understand how important a successful transition is for you, your family and your company. Our experienced and knowledgeable CPA staff are adept at designing custom business succession plans that fit our clients’ exact circumstances. We provide candid advice in plain English, and work closely with you to craft a succession plan that achieves your goals for the future.
Goals of a business succession plan
Your business succession plan must align many practical considerations with your sentiments and those of your family. Generally, a sound business succession plan sets the following goals:
- Minimize tax liability — Transferring a business to an heir can trigger federal estate and gift taxes. But advanced planning that properly structures the transfer can minimize losses due to taxation.
- Maintaining strength of branding — Certain businesses are heavily identified with the founder. He or she is the brand and any change in ownership carries a threat of brand dilution. A sound succession plan must contain strategies for reducing the negative impact of the transition.
- Maintaining customer loyalty — Many businesses are built on relationships. It’s quite possible your clientele will suddenly feel comfortable taking their business elsewhere when you step aside. Your plan must contain steps to prevent that from happening.
- Placing the most talented successor in place — If you have several children who would like to take over, you must avoid a creating chaos that would ensue if you “tried to make all the kids happy,” or handed the reins to one who was not up to the task. Your plan must place the right person in the job and set that person up for success.
- Avoiding family discord — Unfortunately, business succession often gets muddled, so heirs find themselves holding an interest in the company without a clearly defined role. The clearer your plan is, the better the chance that disappointed heirs will get over their hurt feelings and support your named successor.
- Providing retirement income for exiting owner —Depending on the financial success of the business and your other retirement savings, you might want the business to continue to provide you and your spouse with income during your retirement. Transfer of ownership has to be structured and scheduled to support your goals.
In your situation, you may have additional considerations. For example, succession planning many times requires a business valuation, which is another service we can provide. We are ready to work personally with you to address all of your concerns and incorporate them into your succession plan.
Implementing your business succession plan
There are several key elements to the successful implementation of your plan:
- Advanced planning — The more time you take to plan, the greater your options, especially when it comes to tax savings. You can get feedback from your family and alter your plan appropriately according to their input. You may have misjudged their level of interest in taking over the company. Or, the successor you choose may need to get specific training or experience before knowing whether he or she is suited to the job.
- Period of transition — Easing in new management is helpful for many reasons. Your successor learns the ropes under your guidance without inordinate pressure right out of the gate. Your clients get used to the new management and gain a level of comfort. This helps with client retention.
At Breon & Associates, our experience with tax issues and estate planning, as well as business accounting, makes us eminently well qualified to help you plan the eventual transfer of your business to the next generation of ownership. Talk to us today.
For a carefully crafted business succession plan, contact Breon & Associates in Harrisburg today
Small business owners who are approaching retirement should put a sound succession plan in place. At Breon & Associates, our team of professionals have vast experience helping small business owners’ transition to the next generation of leadership. Call us today at 717-273-8626 or contact our Harrisburg office online to schedule an appointment.
415 Market Street, Suite #205
Harrisburg, PA 17101
Camp Hill Office:
3461 Market Street, Ste 101
Camp Hill, PA 17011
901 Dawn Avenue, Suite A
Ephrata, PA 17522
4 Park Plaza, Lower Level