In recent years, the family drama surrounding an aging media mogul — and his unresolved succession plans — have been at the center of a hit television show. For family businesses, succession planning is a sacred duty, reflecting stewardship and foresight.  But relationships among family members are sometimes just as complicated in real life as they are on TV and monetizing a closely held business to help fund retirement often takes longer than expected.  As faithful custodians of legacy, we navigate this transition with humility, seeking divine wisdom to guide our decisions.

In fact, only 34% of family businesses have a robust, documented, and communicated succession plan in place.1 Much like the fictional billionaire in “Succession,” some leaders avoid the issue because they love running their businesses and don’t want to stop any time soon.

But one never knows what the future has in store. Even if you are happy, healthy, and determined to stay involved in your business for years to come, you might be glad you took the time to develop a thoughtful succession plan.

Set a target

It might be wise to have a realistic retirement date in mind. Any effort to identify and groom a successor might take longer than you expect. And if you plan to sell your company, it could take several years to find a qualified buyer, begin the ownership transition, and finalize the transaction. To get the best possible price and terms, you may need to focus on improving the company’s balance sheet before you put it on the market.

Stage your exit

Keeping your business in the family may be an easy decision if an adult child or another relative is capable, willing, and prepared to take over. If so, finding ways to reduce the value of the business on paper could help you gift ownership shares with fewer tax consequences.

Otherwise, it may be possible to sell your business to co-owners, outsiders, or even your own employees. Closing and liquidating the assets could be the only viable option for some businesses.

Invest for retirement

Making annual retirement plan contributions with some of your profits can build wealth outside of your business and help insulate your personal financial picture from risks associated with your business’s distinct market. Building a separate investment portfolio might also provide greater flexibility during and after a transfer of ownership.

All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.

1) US Family Business Survey, PwC, 2023

 

In the Word

It is true! The Lord has risen and has appeared to Simon.

Luke 24:34

These words echo through the corridors of time, resonating with the profound truth of Easter morning. They encapsulate the awe, wonder, and joy of encountering the risen Christ.

Reflect on the disciples’ journey from despair to delight, from doubt to certainty, as they encountered the resurrected Savior. In their proclamation, we find the essence of faith — a faith grounded not in mere belief but in the transformative power of encountering the living Christ.

Today, as we celebrate the resurrection, let us embrace the certainty of Christ’s victory over sin and death. Let us echo the disciples’ proclamation with hearts filled with gratitude and praise. For in Christ’s resurrection, we find hope, redemption, and eternal life.

May Luke 24:34 inspire us to proclaim with unwavering faith: “He is risen indeed!”

 

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Sources: Broadridge Investment Management Solutions

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