Washington State Business Succession Planning Attorneys
75% of business failures follow the unexpected death of the founder.
Source: Prince and Associates. Analysis of 749 family businesses that failed within 3 years of transfer to next generation.
If you’re like most business owners, you know your business inside and out. You get the job done, day after day, racing around without missing a beat. You’re overseeing multiple responsibilities: sales, marketing, inventory, managing employees, meeting clients, monitoring cash flow and much more. You feel like you can do it all, and you usually do.
3 out of every 10 Americans in the workforce will become disabled before they retire.1
When you think of succession planning, thoughts of passing the business on at retirement may come to mind. But what if something unexpected happens before then and you are not able to run the business – even temporarily?
It’s critical to have a strategy with a contingency plan that spells out what you want to happen if you die prematurely, become disabled, if you or a business partner gets divorced, loses a professional license, etc.
Many business owners have not put a plan into place that will enable them to pass the business on to a son, daughter or valued employee, while also providing for their spouse. It’s probably not a coincidence that only 35% of small business owners have a formal succession plan3 and only about 30% of small businesses survive the transition to a second generation.2
Replacing a key employee can cost 150%–250% of their salary.2
A key employee is someone you rely on, whose skills and business knowledge may be hard to replace. Losing a key employee to death, disability or a competitor can result in a significant financial loss to the business. So it’s important to protect your business with incentives that encourage key employees to stay long-term.
Set your business apart with key employee benefit plans. Often called “executive benefits,” key employee benefits show employees that you value their contributions and want them to be a part of the long-term success of the company. These benefits can help reward and motivate your most critical employee, and also offers a way to distinguish you from the competition.
Your financial professional can help you put employee benefit programs in place that enable you to buy loyalty and retain top talent while providing business flexibility.
Many business owners have not put a plan into place that will enable them to pass the business on to a son, daughter or valued employee, while also providing for their spouse. It’s probably not a coincidence that only 35% of small business owners have a formal succession plan3 and only about 30% of small businesses survive the transition to a second generation.4
1Source: Social Security Administration, 2007.
2Bliss & Associates Inc., Wayne, NJ Consulting Firm, 2012.
3LIMRA Small Business Owners, 2009.
4"Don’t Let a Weak Succession Plan Become a Wealth Destroyer." National Underwriter, 2007.