Challenge: First-generation Calgary business owners, a couple in their late 50s, were concerned about transitioning ownership of the family business to their 4 children in a fair manner considering their various roles and contributions to the business.
Solution: With the guidance of Three60 Wealth, the clients engaged with one of Three60’s trusted tax advisors. A succession plan was created to transition the family business to the children based on the ratio of their respective salaries over a period of time.
Outcome: The family was comfortable in moving forward with the succession of the business, having confidence that everyone felt heard and considered.
Sadly, only one-third of family-owned businesses survive the transition to the second generation. And from those, only one-third again will survive to the third generation, leaving the chances of your grandchildren taking over your business at about one in ten.
Sooner or later, everyone wants to retire. If you own a family business, there are many more considerations than just how much income you will need. The question of what happens to the business becomes paramount. Who will manage the business when you are no longer around? What is the best way to transfer ownership? How will the ownership of the business be structured? Will you be able to transition the business to the next generation, or will you just sell it?
Business Succession Planning manages these issues and answers these challenging questions to ensure a smooth transition between you and your future business successors. The relationships and the emotions involved can complicate the business succession process. Business owners must come to terms with their own mortality, discussing tough topics such as aging, death, and their personal financial affairs.
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