Business and Succession Planning
Building wealth through a family business can be a lucrative and blessed enterprise. Of course, the business must eventually pass to the next generation of owners and managers. If the current managers ask who will eventually receive cash flow, ownership, management and control, there will be disagreements about the amount and timing of transfers.
Throughout more than 40 years of doing business succession planning, we have developed proven methods of uniting stakeholders around business succession goals. Once goals are clarified, we show the likely taxes related to the proposed transfers. We can usually show how to lower the tax liabilities substantially.
The business succession experts in California at Bohm Wildish & Matsen, LLP have decades of experience helping families create and implement business succession plans. We use flowcharts, numbers, checklists, and legal document summaries to show how the wealth and assets built over the years can be preserved, protected, and passed on successfully to the next generation.
The process of business succession planning begins with a clear summary of available assets. This requires that a skilled appraiser value your business and related property. The appraisal process often fosters fruitful discussions about whether you should continue to build business value, sell the business to staff members (through an ESOP or related transaction) or prefer a third party sale.
“While business succession can be a relatively simple process, we do caution our clients regarding passing their assets, wealth, or businesses into the hands of ill prepared successors or beneficiaries.”
While the founder of the business has spent many years building the business, successor managers may need more time to learn from mistakes, build relationships, establish a solid strategic plan, and put tax strategies in place. Generation one must have confidence that future managers have the “fire in the belly” to build the business in a way that maintains staff loyalty and focuses on client service.
When you pass your business to a successor who hasn’t been taught the value of the money, you are more than likely going to experience something psychologists call, “sudden wealth syndrome.” Much like people who win the lottery, successors who are just given assets will typically squander their resources on material things that provide immediate gratification rather than on pursuits that will continue to build the family wealth.
At Bohm Wildish & Matsen, LLP, we understand the importance of building a mature successor manager team. We confirm that the values of the business are passed on to future managers before the value is passed to them.
Bohm Wildish & Matsen, LLP team members know how to provide wealth and business management training to successor managers and owners. This maximizes the likelihood that our clients can transfer their legacy to the next generation in the most cost saving and efficient manner.
Bohm Wildish & Matsen, LLP has written a detailed and easy to understand white paper on the importance of transferring business values along with business assets to the next generation. You can request a copy of the white paper, “Transferring Business Value and Values to the Next Generation” by calling us.