Partner Partner Content Protecting what you’ve built: Why business owners should think about their succession plan 

Business owners often have a million things to juggle with day-to-day operations. Have you taken the time to slow down and think about what you can be doing now to prepare yourself and your business for later in life? If the answer is no, you aren’t alone. Although 76% of business owners plan to transition over the next 10 years, only 35% of businesses have a formalized succession plan in place.  

You’ve worked hard to grow your business, so it’s important to think about what will happen when you want to move on from the company – whether that’s retirement, selling the business or trying something new. Thoughtful planning in advance can help give business owners peace of mind knowing that both you and your business will be cared for in retirement. A plan can also ensure your employees are cared for and, if you choose, allow your business to continue serving the local community.  

Here are some tips for business owners to consider: 

Having a plan is key 

Planning ahead can help give you peace of mind and avoid unnecessary stress in the future. Everyone’s situation is unique, so make sure your plan incorporates your personal needs and desires. A financial advisor can be a helpful partner in putting together your plan. They can also identify how you can work towards your personal and retirement goals, separate from equity you may have in your business. 

Also consider working with an estate planning attorney to help incorporate your business into your estate plan. A basic estate plan for most business owners should include: a revocable trust, a will, a financial power of attorney, a health care power of attorney and beneficiary designations. Make sure to review these documents periodically with your attorney to ensure they still reflect your wishes. 

Build a trusted team 

Assembling a team of trusted professionals can play a big role in making sure your preferences are honored after you transition away from the business. They can also help evaluate the value of your business, which can be important to know in the succession planning process.  

Consider including your financial advisor, certified public accountant, business and estate planning attorney, insurance advisors, business valuation professional, investment bankers and/or business brokers. Spending time, effort and money now to build a team of people you trust can help drive more favorable outcomes in the end.   

Don’t forget about your own retirement  

When it comes to investing for retirement, the sooner the better – whether you are a business owner or not. Starting with investing now can give your money more time to potentially grow.  

If you don’t have a company-funded 401(k), there are other retirement planning options for business owners to consider, like an IRA or solo 401(k). Make sure to consult your tax advisor, as they can help you understand the tax implications of each option and identify which one may be right for you. 

Securing your legacy 

Taking the time now to thoughtfully plan for your retirement as a business owner may seem daunting, but it can help ensure peace of mind later in life. There’s a lot to consider, so staying informed is key. If you’re looking for more resources in your financial journey as a business owner, visit our library of free educational content at chase.com/theknow.   

JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.   

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC.