Wisconsinites are entrepreneurial. Small businesses in Wisconsin account for 99.4 percent of the state’s businesses. These business owners know that running a small business takes dedication, hard work, and vision toward the future. Whether it’s a family business or something you’ve built from the ground up, planning for the future is vitally important. Having a solid succession plan is an essential component of business ownership.
A succession plan ensures that your business continues to thrive even if you retire, become incapacitated, or pass away. Without one, your business and your family’s financial well-being could be at risk. At Borakove Osman LLC, we have been helping Madison area small business owners with planning and continuation for years. Here’s our view on why every small business owner in Wisconsin needs a succession plan.
Protect Your Business’s Future
A well-crafted succession plan safeguards the continuity of your business. Without a plan, your company may face uncertainty, legal battles, or even closure. A succession plan helps by:
- Identifying who will take over in case of retirement, disability, or death
- Outlining a clear transition process to minimize disruption
- Ensuring that employees and customers have confidence in the business’s future
Avoid Family Disputes
Many small businesses in Wisconsin are family-owned, and without a clear plan, disputes can arise. A succession plan helps prevent conflicts by:
- Clearly defining roles and responsibilities for family members
- Outlining fair distribution of business assets
- Preventing disagreements over leadership and ownership
Minimize Taxes and Legal Complications
A properly structured succession plan can help minimize estate taxes and avoid probate issues. Without a plan, your heirs could face:
- A lengthy and costly probate process
- Significant estate and inheritance taxes
- Potential liquidation of business assets to cover tax liabilities
By working with an experienced small business and continuation planning attorney, you can structure a plan that preserves your business’s financial health and reduces tax burdens.
Provide Financial Security for Your Family
Typically, the business will be one of your biggest assets. If something happens to you, your family may depend on it for financial stability. A succession plan ensures that:
- Your family receives the financial benefits of your hard work
- Business debts and obligations are addressed properly
- Income streams continue for dependents and beneficiaries
Plan for Unexpected Events
Life is unpredictable. Whether due to sudden illness, disability, or an untimely passing, unexpected events can jeopardize your business. A succession plan prepares for contingencies by:
- Designating interim leadership
- Establishing emergency decision-making processes
- Ensuring business operations continue smoothly
How to Create a Succession Plan
Business succession plans usually involve the following key steps:
- Define Your Goals – Determine your long-term objectives for the business and how you want it to transition.
- Identify a Successor – Choose a family member, employee, or third party who is best suited to take over.
- Draft Legal Documents – Work with an attorney to create buy-sell agreements, trusts, or other necessary documents.
- Plan for Taxes – Develop strategies to reduce tax liabilities and protect business assets.
- Communicate Your Plan – Ensure key stakeholders understand the plan and their roles in the transition.
- Review and Update Regularly – Life and business circumstances change, so revisit and adjust your plan as needed.
Experienced Madison & Dane County Small Business Planning and Continuation Attorneys are Here to Help
As a small business owner, you are a professional multitasker. Add succession planning to today’s to-do list. At Borakove Osman LLC, our experienced small business and continuation planning attorneys in Madison, Wisconsin, are here to help. Contact us to get started building your business’s succession plan today.
