Business Planning Questions

It is essential to consider the following questions if it’s important to you to transfer ownership to those you love instead of selling your company to a third party. Doing so will ensure that your company will have the opportunity to provide income and financial security for those important to you and create a profitable entity for what might otherwise be an unmarketable business.

1. How would the creditors of the business react if you or another shareholder dies or became disabled for a long period of time?
2. If you died or became disabled, would you want your family to retain the business?  Sell it?  To whom?  At what price?  Under what terms?
3. Would you consider selling your business to key employees?  Are there any who would want to buy it?  Can they afford to buy it?
4. When was the last time your financial advisor estimated the federal estate tax on a “going concern” and the value of your business?  How did they arrive at that figure?  Is the valuation realistic in today’s market?
5. What would be the income-producing ability of the business if you weren’t able to direct it?
6. Who would control your business at your death or disability?  Can or will that same person run the business?  If not, what have you done to avoid conflicts between those parties?
7. Which members of your family are in the business now or are likely to enter into it in the near future?  How long will it be before they are capable of contributing in a meaningful way to sustain the profits of the business?  What part of your business is your son or daughter interested in handling?  Are members of your family currently working at the business and are not only physically capable but also emotionally able to run it in your absence?
8. Who will operate the business until your designated successor is ready to take over?  What have you done to keep that person in the business and interested in building and strengthening someone else’s financial future?
9. What have you done to provide security or to “even things out” for those members of your family who will not be coming into the business?
10. If you have a partner in the business who passes away, are you comfortable being in business with your partner’s spouse?
11. If your business partner was disabled for 4-6 months, would you want to continue his full salary during that time?  If that disability became permanent, how long could you afford to pay that salary?

As always, we at Kasper & Associates are here for you.  During our 40+ years in business we have worked with owners of closely-held businesses to provide answers to the questions listed.  Feel welcome to call to discuss these or other issues of interest.

Ed Kasper, Founding Partner

817-738-4220, ext. 103