Michigan Estate Planning Blog

How Do You Plan a Business Succession?

 

When business owners die without estate or succession plans, chaos ensues as family members clash over leadership decisions and determining the direction of the business. Even the closest families can quickly descend into a battlefield of hurt feelings, endless arguments and faction-building, according to the article “How to Make Your Business Outlive You” from next avenue.

Family disagreements often escalate into legal disputes. Lacking leadership, businesses spiral downward and often must be liquidated, leaving behind broken families with severely depleted assets.

This scenario occurs in small businesses on a regular basis. Owners with the vision and tenacity to take their ideas and create a successful enterprise are often so passionate that they can’t imagine the business without them.

A well-defined succession plan matters to more than just the family and their customers. According to the Small Business Association, businesses with less than 500 employees account for 99.9% of all firms in the U.S., 43.5% of the country’s total economic output, and just under 66% of new jobs created. A well-designed succession plan contributes to the national economy,

Having a succession plan in place protects the business and the family from unforeseen circumstances and creates a roadmap for the future. What is the best time to start? When all is well, leaders are healthy and there’s no internal drama.

Start by contemplating your legacy. How do you want your family and employees to benefit from the value created by the business? Clarifying this will drive much of what follows.

Seek professional guidance. An estate planning attorney should be one of several professionals to ensure that the plan complies with laws and regulations in your jurisdiction. You also want to be sure your business succession plan aligns with your estate plan. Otherwise, the resulting confusion could lead to prolonged difficulties and even litigation.

You’ll need a power of attorney for someone to be able to make decisions if the business owner becomes incapacitated. A buy-sell agreement establishes a fair market value for the company. Life and disability insurance policies provide financial security for the owner and key personnel.

Put it in legally enforceable documents. Discussions only go so far. Executing a formal series of documents ensures that the plan will be enforceable by a court if needed. Language should be clear, with no ambiguity, to transfer ownership and business shares.

Potential successors need to be identified. Will everyone step up to the next level if the business owner becomes incapacitated or dies? This isn’t always the best solution. Sometimes, skills override structure.

Reviewing and updating the business plan should be done as often as you update an estate plan. Whenever there is a major event in the business, review the plan to see if it is still relevant.

A succession plan is all about legacy, continuity, safeguarding a business, letting employees know they are valued and reducing volatility in the family’s future. It allows the business owner to communicate their values and vision, even if they are not present to be part of the future.

Reference: next avenue (Dec. 12, 2023) “How to Make Your Business Outlive You”

Older Workers Improve Their Resumes to Maximize Hiring Potential Saginaw, Michigan

This is typically the time of year when many employers re-evaluate their staffing needs. Some decide to hire additional talent, and others feel they need to cut some non-essential positions for the greater good of the company. Either way, having an updated resume ready at the New Year is a wise plan. For older individuals, reaching retirement means managing a budget with savings, social security, and part-time income. Having a polished resume is extremely important, as an analysis of the most recent job data by the AARP Public Policy Institute shows. Consider this: unemployment for older job seekers is now 56 weeks on average, compared with 37 weeks for younger workers. In light of this trend, it is crucial for older workers to revise their resumes to catch the eye of potential employers. As reported recently in The Wall Street Journal, a new program known as the American Association of Community Colleges’ Plus 50 Initiative is helping seniors do just that. The Plus 50 Initiative recognizes the experiences, skills, and leadership that the baby boomer generation possesses. Given the possibility of unemployment facing many older workers, the Plus 50 Initiative seeks to harness the experience of an older generation and use it to teach new skills to an already successful generation. Many times, the only thing standing between a senior and a job is a lack of technical knowledge and computer experience. Taking a short class on computer software is one of the best ways for older job seekers to brush up on these skills, enhance their resumes, and show employers that they are up to date with technology. Now is the time to reevaluate how you can better market yourself in an ever-changing economy and job market.References:

The Wall Street Journal (October 5, 2012) “Can classes give older workers an edge?

For more information, see www.jerryreiflawyer.com

 

Older Workers Improve Their Resumes to Maximize Hiring Potential Mid-Michigan

This is typically the time of year when many employers re-evaluate their staffing needs. Some decide to hire additional talent, and others feel they need to cut some non-essential positions for the greater good of the company. Either way, having an updated resume ready at the New Year is a wise plan. For older individuals, reaching retirement means managing a budget with savings, social security, and part-time income. Having a polished resume is extremely important, as an analysis of the most recent job data by the AARP Public Policy Institute shows. Consider this: unemployment for older job seekers is now 56 weeks on average, compared with 37 weeks for younger workers. In light of this trend, it is crucial for older workers to revise their resumes to catch the eye of potential employers. As reported recently in The Wall Street Journal, a new program known as the American Association of Community Colleges’ Plus 50 Initiative is helping seniors do just that. The Plus 50 Initiative recognizes the experiences, skills, and leadership that the baby boomer generation possesses. Given the possibility of unemployment facing many older workers, the Plus 50 Initiative seeks to harness the experience of an older generation and use it to teach new skills to an already successful generation. Many times, the only thing standing between a senior and a job is a lack of technical knowledge and computer experience. Taking a short class on computer software is one of the best ways for older job seekers to brush up on these skills, enhance their resumes, and show employers that they are up to date with technology. Now is the time to reevaluate how you can better market yourself in an ever-changing economy and job market.References:

The Wall Street Journal (October 5, 2012) “Can classes give older workers an edge?

For more information, see www.jerryreiflawyer.com

 

Avoid Losing Your Most Talented Employees Saginaw, Michigan

It’s no secret that the men and women in today’s workforce will change jobs frequently. Furthermore, it’s not a secret that training employees is costly and that good talent is hard to find. With that said, why don’t more CEO’s and managers focus on retaining talent? A recent Forbes article sheds some light on the disconnect and discusses the “10 Reasons Your Top Talent Will Leave You.” The abbreviated version includes: 1. You failed to unleash their passions. 2. You failed to challenge their intellect. 3. You failed to engage their creativity. 4. You failed to develop their skills. 5. You failed to give them a voice. 6. You failed to care. 7. You failed to lead. 8. You failed to recognize their contributions. 9. You failed to increase their responsibility. 10. You failed to keep your commitments. If you have seen a high rate of turnover within your company, this article may be worth reading. But once you’ve read the article, follow through with its suggestions or else you may continue to lose your most talented employees.'

Reference:  Forbes
(December 13, 2012) “10 Reasons Your Top Talent Will Leave You”

For more information, see www.jerryreiflawyer.com

 

Avoid Losing Your Most Talented Employees Saginaw, Michigan

It’s no secret that the men and women in today’s workforce will change jobs frequently. Furthermore, it’s not a secret that training employees is costly and that good talent is hard to find. With that said, why don’t more CEO’s and managers focus on retaining talent? A recent Forbes article sheds some light on the disconnect and discusses the “10 Reasons Your Top Talent Will Leave You.” The abbreviated version includes: 1. You failed to unleash their passions. 2. You failed to challenge their intellect. 3. You failed to engage their creativity. 4. You failed to develop their skills. 5. You failed to give them a voice. 6. You failed to care. 7. You failed to lead. 8. You failed to recognize their contributions. 9. You failed to increase their responsibility. 10. You failed to keep your commitments. If you have seen a high rate of turnover within your company, this article may be worth reading. But once you’ve read the article, follow through with its suggestions or else you may continue to lose your most talented employees.

Reference:  Forbes
(December 13, 2012) “10 Reasons Your Top Talent Will Leave You”

For more information, see www.jerryreiflawyer.com

Avoid Losing Your Most Talented Employees Saginaw, Michigan

It’s no secret that the men and women in today’s workforce will change jobs frequently. Furthermore, it’s not a secret that training employees is costly and that good talent is hard to find. With that said, why don’t more CEO’s and managers focus on retaining talent? A recent Forbes article sheds some light on the disconnect and discusses the “10 Reasons Your Top Talent Will Leave You.” The abbreviated version includes: 1. You failed to unleash their passions. 2. You failed to challenge their intellect. 3. You failed to engage their creativity. 4. You failed to develop their skills. 5. You failed to give them a voice. 6. You failed to care. 7. You failed to lead. 8. You failed to recognize their contributions. 9. You failed to increase their responsibility. 10. You failed to keep your commitments. If you have seen a high rate of turnover within your company, this article may be worth reading. But once you’ve read the article, follow through with its suggestions or else you may continue to lose your most talented employees.

Reference:  Forbes
(December 13, 2012) “10 Reasons Your Top Talent Will Leave You"