When reporters ask billionaire Bill Gates what will happen to Microsoft if he should die, Gates has an answer. As one of America’s richest men, Gates knows who will succeed him and how much he will leave to his heirs. He’s confident that with or without him, Microsoft will go on. While few can match Microsoft’s size, profitability or number of shareholders, when it comes to succession planning, all businesses should follow Gates’ example.
Entrepreneurs busily running their businesses sometimes fail to plan for the day when they may no longer be willing or able to continue. So to start the process of succession planning, business owners should ask themselves:
• Who will own and/or run this business in the event of my death or disability?
• After any estate and other transition-related costs, will sufficient money remain for the business to continue running successfully and provide enough income for my family?
• Is this business organized to most effectively minimize income and estate taxes, while facilitating a smooth transition?
• Are all aspects of my succession plan up to date to account for changes in value, changes in key employees of the business and changes within the family?
Be like Bill, plan for succession