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Business Succession Planning

business succession planning

Business Succession Planning

Business succession planning is a critical part of a successful business in Carlsbad or the surrounding San Diego area. You have worked hard, maybe a lifetime, building your business. It has personal and financial value. A succession plan ensures that when you can no longer run your business, you have planned for that day.

If you are one of the many  small business owners here in the Carlsbad area, Andrew Fesler is experienced local  lawyer with extensive knowledge in creating a comprehensive business succession plan.

What is a Business Succession Plan in Carlsbad?

A business succession plan is a plan of action for the future ownership and management of your business. It creates a roadmap for your business if you, as the owner dies, retires, or is unable to continue running the company. It also considers a plan for if a key employee resigns, retires, gets fired, or dies. It lays out the process of passing control of the business to others.

What Are the Elements of a Business Succession Plan in Carlsbad?

Business succession plans are not one-size-fits-all. Each plan should address the business’s and owner’s unique needs and goals. However, three essential elements should be considered and included in all business succession plans in Carlsbad.

1. Transfer of Ownership

Your business succession plan should include who will take ownership of the business at your retirement or death and who will have voting control of the business interest. If appropriate, the plan should address how the new owner will pay for the business and the tax implications of the transfer.

2. Transfer of Leadership

Your business succession plan should include the individual(s) who will assume the management responsibilities after the business changes ownership. The business succession plan can also address whether legal documents, like employment contracts and non-competes, will be necessary. The new owner and the new leadership may include or be the same person but not always.

3. Financial Planning

Your succession plan should address all the potential financial implications of an ownership transition (i.e., tax implications, retirement plans, and life insurance policies).

How Do I Create a Business Succession Plan in Carlsbad?

Meet with Andrew Fesler and discuss these five basic steps. With our assistance we can help create a business succession plan for you. 

1. Discuss your business with Attorney Fesler 

Creating a comprehensive business succession plan can be complicated, but an experienced lawyer who understands business succession planning can guide you through the process.

Andrew “Andy” Fesler is a local Carlsbad attorney who will listen to you about your company such as your revenue, your business model, your employees, expected future earning, and all the things that make up the value and success of your company.

Together you will begin to address what needs to be included in your comprehensive business succession plan. He will take everything into consideration, such as tax implications, relevant regulations, financial arrangements, insurance coverage needs, and training requirements.

2. Decide on the Objective of Your Succession Plan

Identifying the goals you want your succession plan to meet is the next key element. He will discuss some objectives to get you thinking. For example your objectives may include

  • Deciding the person who you want to take over ownership of your business or if you should sell.
  • Picking the individuals who will assume management responsibilities.
  • Taking care of your personal financial future and retirement plans.

3. Consider the Current Business Structure and Value

Review with Andy your business’s current structure, such as the roles and responsibilities of key personnel. You must also assess your business’s current market value. This information will help you understand the risks associated with a change of ownership and decide what changes are needed to prepare the business for a transfer of ownership.

4. Identify Potential Successors

There are three general options for potential successors—key employees, family members, or a third-party sale.

This decision is difficult and will require careful reflection and honest conversations. In addition to deciding on a successor, you should address any training or leadership development your successor will need.

5. Update Your Estate Plan

From this will develop a business succession plan that can be put in place. This plan will reflect your wishes for your business once you have passed on, or  retired, or for some reason are unable to continue running the company.

After completing your business succession plan, you should review and update your personal estate plan to ensure that it is in sync with your business succession plan. You want your estate plan to reflect the instructions in your succession plan. These documents need to work hand-in-hand.

Your Carlsbad Business Planning Attorney Andrew Fesler

Because your business is a valuable asset, with employees who count on it for their livelihood, a good business succession plan, like a good estate plan, plans for the inevitable such as death or retirement, as well as the unexpected such as an accident or illness that leaves you incapacitated.

Andrew Fesler is an experienced Carlsbad’s estate planning and business planning attorney with over twenty years of experience. He is qualified  to help you create a business succession plan that fits your needs and works with your own personal estate plan. Contact our office today at (760) 444-0943 for a free consultation.