No matter how much you enjoy running your business now, you never know when a time may come where that may change. Whether through a shift in interest or a turn in health, you may one day find yourself needing to pass on your business.
Thus, you should have an idea of how you want to do this. Knowing what your options are can help streamline the process.
Retirement after work
Business.com discusses your many options when passing down your family business. First, consider your retirement options. Many business owners like you do not have a retirement fund or pension set aside. Instead, you live off of your business. While this is fine in the moment, it provides an issue if you cannot work in the future.
There are many ways around this hurdle, though. For one, you could stay on as a paid employee, taking on an advisor or managerial role. You could also stay on as an investor, too.
Who can you pass your business to?
Next, you need to consider who you will hand the business down to. You can gift it to a family member who intends to take on the reigns. In doing so, you may have to deal with a gift tax, though. Prepare yourself for this possibility. Note that you can choose to gift part of the business, or the entire thing. If you gift part, you may still be subject to paying taxes.
You can also sell the business. You can sell parts of the business or the entire thing. Note that you will likely not receive a lump sum of cash for this purchase, as most people do not have the liquid money necessary to do this.
As each option has its own pros and cons, it is essential for you to consider them all carefully.