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Small Business Owners Should Create a Solid Exit Planning Strategy for Long-Term Viability

Small business owners work hard to grow their business and manage operations. But when it comes to retirement planning, business valuations, insurance, and even exit planning, these tasks always get pushed to tomorrow. Being proactive about these important business decisions is actually a vital part of a business’ success and longevity. To truly plan for a life where you get to enjoy the success of your business and see it flourish after you retire, you need to consult a business attorney that can guide you in creating a sound business strategy.

Steps for a Effective Business Continuation Strategy

Business Valuation
Determine a method to value your business on a yearly basis. A business attorney can create a strategy in the event that a partner leaves due to retirement, disability, or death and plan for who retains ownership of the company and who gets paid for that portion of the business. A business attorney will ensure the plan meets IRS standards and asset purchase agreements accurately reflect the needs and wishes of the business owners.

Retirement Planning & Life Insurance
A knowledgeable business attorney will create a plan to provide a business owner with retirement income, life insurance, and investment choices. As the business owner, you are vital to the business’ livelihood and should have a worst case plan in place in the event of death or disability.

Retirement planning can also include buy-sell agreements so that the owners who do remain with the company can purchase a departing owner’s share of the business. This is especially helpful should future conflicts arise when an owner’s family or estate has differing views about business operations or planning that can complicate the livelihood of the business’ sales, productivity, and direction. Having a plan in effect will lessen the likelihood of these types of disputes and should they arise there will be a written and enforceable plan of action in place.

Exit Planning
A business attorney will provide legal advice and coordinate your estate planning to draft a legal agreement for your exit strategy. With due diligence and knowledge of the implications of each decision, an attorney will guide you to have a solid plan when you decide to retire, transfer ownership, or have a succession plan in place. An attorney will work with your CPA and financial adviser to ensure the goals, advice, and insurance vehicles will help the business thrive and lessen tax obligations.

All of these factors have consequences for your business, your valued employees, assets, and finances. This is why getting advice and direction early on from a trusted and experienced legal professional is recommended.

Onda, LaBuhn, Rankin & Boggs, Co. LPA has been serving clients throughout Ohio since 1991. OLRB’s partners have more than 85 years of combined experience and developed a unique and diverse practice to meet the various needs of our business and individual clients. OLRB practice areas include but are not limited to: Corporate, Finance and Business Services; Commercial Litigation; Real Estate; Construction; Trusts, Estates, and Wealth Transfers; Taxation; Labor & Employment and Government Relations & Administrative Law.

OLRB would be pleased to discuss your legal representation needs. Contact Onda, LaBuhn, Rankin & Boggs Co., LPA at 614-716-0500.

Posted on Friday, May 4th, 2012 at 8:29 pm and filed under Corporate & Business Services.

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