To Owners of Closely-Held Businesses
Because our economic environment has bcome more precarious it is more important than ever for owners of closely-held businesses to think about their future and what happens to their business. Here are some key questions that need to be addressed:
- Have your personal goals been defined and have you established a vision for transfering ownership of the business?
- Do you have a successor in mind?
- Have you addressed the techniques for reducing or eliminating estate taxes?
- How much liquidity do you have and can you avoid a forced sale of the business?
- Is there a buy/sell agreement in place?
- What happens if you become disabled?
- Do you have adequate personal retirement savings to meet your cash flow requirements?
- What is your business worth and could you get it if you wanted/needed to sell?
- Have you considered the techniques for transfering stock to achieve your succession goals?
If you haven’t addressed these questions, you might want to take a minute and give them some consideration. In many instances, family businesses don’t have the liquidity to continue growing and lack the level of management talent and expertise needed to cope with growing a business that is capable of surviving in these tough economic conditions. In order to avoid a shutdown or a forced garage sale it might be time to address these questions before a problem becomes a crisis.
Remember it’s the business that provides for the salaries and wages and ultimately the liquidity to support the employees and the owners.