Boomer's family doesn't want take over the Family Business
Are you considering selling, buying, merging or transferring your business? If you are, you are not alone. As the boomer generation retires over the next several years the statistics vary from estimates ranging from six to eight trillion dollars of business value that will be affected. That’s correct, you read trillion with a T!! What will I do with my business? That answer will have a great and permanent impact in regards to quality of retirement, family values, various tax implications and employee morale! The highest priority in answering this question is planning. The plan for a business transfer needs to be well thought out. There is not a simple nor a single answer. The largest variable is your family values. During my thirty year career in consulting and advising business owners my single biggest surprise is that in the past few years I have found a large segment of the next generation wants nothing to do with ownership in the family business. The children of the boomers grew up in the family business and many do not want that lifestyle for their children. They want to be involved with their children’s education, sports and other activities vs. running a business 24/7. During a business transfer some of the issues you need to consider are: How to acquire fair market value from my business. Remember you are selling revenue stream in addition to your hard assets. This is often overlooked. Capital gains taxes at federal/state rates can be as high as 28%. These taxes in some scenarios can be eliminated or deferred. The recapture tax of section 179 and accelerated depreciation deductions at ordinary tax rates can be devastating! Key successor management needs to be identified and in place. If not, business failure typically follows. Your first major step is to begin the planning process. This typically takes a minimum of two years. Surround yourself with competent outside professionals. Enjoy the fruits of your lifetime labor!! Don’t let your business go up in smoke from a lack of planning!
Managing Partner - Pathfinder-USA Business Consulting, LLC