Keep reading to find out some helpful tips about securing wealth, taught by HBO’s Succession.
Fall television is back - and with it, the highly anticipated arrival of fan-favorite, HBO’s Succession.
While I hope that the daily operations of your business does not match the cut-throat nature of the Emmy Award winning program, nonetheless, the lesson remains clear: succession planning remains an important step in securing your wealth, and there are major pitfalls to be aware of before the process starts.
Passing the baton to the right individual can ensure a business will run smoothly once key leaders have retired, passed away, or moved on to other opportunities. This decision can rank among one of the highest human capital management tasks; the decision is crucial to the longevity of the company. Careful planning will assist making these critical decisions and help to promote a fluid transfer.
As the HBO series demonstrates, choosing a candidate to take over a high performing company can be a daunting task, especially when you have to choose between family members. People can quickly formulate personal agendas to slip into the director’s seat and throw your decision off course. Not only can choosing the right candidate ensure a business’ continued success, but planned development training prior to transfer can assist in tremendous growth in the future.
Three Building Blocks to Remain Protected
Choosing a successor is challenging. Not only will you need to have a solid strategy for how you are going to make your decision, but you will also need to have a back-up in case your candidate falls through. Remember back to the days when you may have risked it all to get to where you are today. At that stage in your life, who would you have wanted to take over your hard-earned creation?
Step 1: Gather Your Questions
The first step in protecting yourself is meeting with a financial wealth advisor to discuss the specifics of your situation. Sitting down with an advisor will determine the next steps to the process, so this is the most important place to start. Here you will begin to create your Estate Plan and take a look at your personal finances to determine and assign assets. Questions you may have: Are potential successors family members or friends? Are you actually ready to step away from your role? Is selling your business the best option? How will the cash from your business affect your retirement plan?
Step 2: Design Your Exit Plan
Once you have wrapped up your personal finances, you will need to establish a well-designed exit plan. This will likely include wrapping up a variety of loose ends before your final departure from the business. You can include specifics like timing of your departure, where you stand on your personal financial goals, facilitation for your retirement, extending the period of employment for the maximum tax benefit for your business, and strategies for long-term growth that you will leave behind. Be sure to have those details fully documented.
Step 3: Prepare Your Departure
When you complete these steps, you will be ready to start working on details of your exit. Be sure to outline any tax related provisions and technical questions with your account, alongside your larger financial team. You will then want to draw up an operating agreement to protect the transfer of ownership for the future of your company. Lastly, gathering tools for the transfer of ownership will ensure you have protected yourself from every end of the spectrum.