What is Business Succession Planning?
Estate planning often involves a specialty called "Business Succession Planning." This term is meant to capture the planning necessary to ensure that a business can successfully pass to the family or to ensure that a business partner is able to purchase the business from the heirs of the deceased business partner.
Such planning is important because only 30% of businesses succeed to the second generation upon the death or disability of the first generation. Here is an article from that gives an overview of business succession planning. Failure to plan is a large reason that 70% that fail.
Arizona has many successful small businesses that beat the odds and have survived the first five years. If your business beat those odds, make sure you have a business succession plan in place. Otherwise, your business is very likely to be in the grim 70% of failed businesses.
I have a friend who was an attorney. He had to quit his firm to take his father's formerly successful business out of bankruptcy. Fortunately, the business is now thriving. However, it is not a tribute to any planning, but rather it is a tribute to the son's remarkable efforts.
