A typical floral shop or studio is often a family-run operation. But what happens when the current generation wants to retire and pass it on to the next? As Hortica Retail Sales Specialist Maria Shepherd shares, determining if your children want the business or not is just the first step.
In the article “Let it go?”, published in the August 2018 issue of SAF Floral Management, author and accountant Paul Goodman took a look at what needs to happen when you transition your business to a new owner.
Goodman recommends asking yourself three things before you start succession planning:
- Are you ready to let go? Retiring and leaving your business to someone else means you need to:
- Be committed to family succession
- Choose a successor and a date to retire
- Imagine life after retirement
- Delegate decision making and authority to someone else
- Do your successors want the business? Don’t assume your child or relative wants to carry on in your footsteps.
- Can your successors run the business? Evaluate their skill sets and determine if they’re well suited for the demands of the job.
But succession requires more than just deciding who will take over. A few other considerations include:
- Minimizing taxes in the switchover
- Determining what you’re trying to accomplish by passing the business along
- Thinking about where the business is heading
- Calculating the competitive environment
- Deciding what position and responsibilities each heir should have and whether the business is large enough to support more than one owner
In addition to making sure that your heirs want to be part of your succession plan, your planning should also include enough time to transition any and all ownership issues such as refiling of articles of incorporation, banking changes, and your business coverages.
For many insurance policies, coverage is not transferable and requires new applications and a underwriting review. If you’re planning to retire in the new year, plan ahead and allow yourself ample time to transition your business to the next generation.
Talk with your Hortica representative to make sure you’re ready to turn your business over to someone else. They’ll be happy to sit down with you and make sure you have the protection you need.
Learn more about protecting your business by checking out the Hortica Resources section.
If you’re considering adding some extra space to your business for the holiday rush or a special program, you’ll want to make sure your insurance coverage also expands into the new space. Take a look at our tips.
We have more business tips from Maria, like preparing your floral operation for the holidays.