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Avraham "AY" Rappaport, CLTC
President, Financial Professional
Yaniv "Jay" Natanov
President, Financial Planner
Eli Rappaport
Vice President, Financial Planner
Shlomo Rosenstein
Financial Professional
Ozzie Marizan
Financial Planner
Joseph Greer
Employee Benefits Administrator
Dylan Pinsky
Client Relations Manager
Premier Financial
6395 Dobbin Road, Suite 102
Columbia, MD 21045
Phone: 240-309-6001
Email: dylan.pinsky@prudential.com
Website: premierfinancial1.com
November/December 2022
Succession Planning for Your Family Business
You may be completely wrapped up in running your business now, but someday you’ll probably be ready to step away. Succession planning can help ensure a successful transition.
Who Will Succeed You?
Succession planning begins with choosing someone to take over the business once you’re no longer involved. It might be a child, grandchild, or another relative or a key employee who will purchase the business from you. Transferring ownership to a family member should include a written plan for compensating the business owner, possibly by providing an income stream during retirement.Grooming Your Candidate
Grooming your successor to take over may take several years, so it’s important to choose a candidate long before you’re ready to turn over the company. Your chosen candidate should become familiar with every aspect of the business by working in different areas or departments. Helping your intended successor build relationships with key clients prior to assuming your role can help ensure a good working relationship and continuity of business.A Written Plan
Create a document that spells out exactly how the succession process will work. Your document should include arrangements for mentoring the candidate and designate specific employees to oversee the company’s operations and procedures. Identify training opportunities that will help your successor take over the business once you’re gone.Selling to a Key Employee
Your successor may be a key employee who will purchase the business from you. An independent valuation can help you determine a fair price. You and your successor will have to come to an agreement on how to structure the sale. Common options are an all-cash transaction or installment payments over a designated period.Tax Concerns
Selling a business can leave you with a large tax bill, so start planning well in advance to protect the proceeds of a sale. Strategies for reducing taxes on a sale include the Qualified Small Business tax exclusion and a non-grantor trust. Your tax advisor can determine if either strategy is appropriate for you.Choosing a successor for your business can be challenging. Starting the process several years in advance can make the transition easier.
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Premier Financial is not affiliated with Prudential Financial. Premier Financial sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Premier Financial is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Premier Financial and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Dylan Pinsky is employed by Eli Rappaport and not The Prudential Insurance Company of America or its subsidiaries.
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