How to choose a successor for your business

Author

Edward Jones - Chad Choate, AAMS

For more information about the author, click to view their website: Edward Jones

Posted on

Jul 12, 2024

Book/Edition

Florida - Sarasota, Bradenton & Charlotte Counties

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As a business owner, you’ve always got a lot to think about today — but what about tomorrow? Have you thought about the person you would like to see as your successor?

If you haven’t, you’re not alone. Of the business owners who have created a succession plan, about 70% have named a successor for their businesses and have taken measures to train and prepare this successor, according to a survey by Morning Consult, NEXT 360 Partners and Edward Jones. But this means that nearly a third of business owners have not taken this action, leaving a big gap in their succession plans.

So, if you haven’t yet named a successor, you may want to start thinking about it. It may be helpful to ask yourself these questions:

Should I look inside or outside? You could find a successor who’s already working for you, or you could find someone from the outside. On one hand, an internal successor would already know how you operate and what you value as you run your business. But on the other hand, an external successor could bring a new point of view and a different set of skills, both of which might prove beneficial. You’ll need to weigh both choices carefully.

• How prepared is a potential successor? Whether you decide on an internal or external candidate, you’ll want to be sure the person you choose is prepared to take over the business. Do they have management skills? Will they share your commitment to your business’s success? Will they be able to build strong relationships with your customers or other employees? Are they enthusiastic about the work involved? You’ll want to evaluate all these types of factors in making your selection. 

Are there potential family squabbles? If you would like a family member to become your successor, you may need to be careful about whom you choose and how you communicate your decision to the entire family. Even if it may make sense for one individual to take over the business, perhaps because they’re already involved in it and they’re interested in taking it over, it doesn’t mean hurt feelings won’t develop among other family members, who may feel they are somehow being “cheated” out of what they view as their share of a valuable inheritance. So, if you are convinced that you’re making the right choice, explain your reasoning to all family members and let them know that you’re also exploring other, tangible ways for them to share in your family wealth, possibly by leaving them other financial assets through your estate plans.

How will my choice of a successor affect my finances? Passing the business to an heir, selling it to an existing employee or selling it to an outside buyer can yield vastly different results for you in terms of your personal finances. You’ll need to consider the possible business transfer arrangements, such as a buy-sell agreement, to determine which one is in your best interests. In doing so, you may want to work with your financial advisor or a consultant with experience in selling or transferring a business.

Choosing a successor is one of the most important decisions you’ll make — so, take your time, evaluate your options and work to reach a decision that works well for everyone involved.


Chad Choate III, AAMS
828 3rd Avenue West
Bradenton, FL 34205
941-462-2445

chad.chaote@edwardjones.com  

 

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. 

Edward Jones, Member SIPC

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Edward Jones - Chad Choate, AAMS

Financial Services 828 3rd Ave. W., Bradenton, Florida, 34205

Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.

Edward Jones - Chad Choate, AAMS

Long Term Care Insurance 828 3rd Ave. W., Bradenton, Florida, 34205

Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.

Edward Jones - Chad Choate, AAMS

Financial Advisor 828 3rd Ave. W., Bradenton, Florida, 34205

Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.