SMALL BUSINESS
MANAGEMENT
Chapter 14
Managing the Transfer of the
Business
Daughter succession
Cookie divorse
West End Coffee
Managing the Transfer of the Business
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Long Range Planning
Alternative Outcomes for the
Business
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transferring ownership to heirs
selling the business to outsiders
closing down the business or declaring
bankruptcy
Succession Planning
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1. Plan Early
2. Start to Gradually Remove Yourself
from the Business
3. Start to Prepare Financial
Statements
4. Grow Stable Revenue
5. Get an Evaluation of the Firm
6. Consider Hiring Professionals
Copyright © 2014
McGraw-Hill Ryerson. All
Transferring Ownership to Family
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Tax and Legal Implications of
Transferring the Business to
Family Members
Methods of Transferring the
Business to Family Members

through a will, purchase and sale,
gifting program, life estate, joint
ownership
Copyright © 2014
McGraw-Hill Ryerson. All
Transferring Ownership to Heirs
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Potential Problems in a Family
Business
high emotional level
blurring of roles
incompetence
non-family employee attitudes
objectives of family owners
Planning for Succession
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Keeping Communication Lines Open
Tax and Legal Implications of Transferring
the Business to Family Members
Methods of Transferring the Business to
Family Members
 through
a will,purchase and sale, gifting
program, life estate, joint ownership
Principles of Success for Family Businesses
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Recognize the Importance of
Objectivity
Create Clear Role Structures
Ensure Competence
Provide Incentives for Non-Family
Employees
Clarify Objectives of Family Owners
Selling the Business to an
Employee
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Make Yourself Replaceable
Ensure that the Transition Is Funded
Manage The Possible Financial, Legal,
and Other Impacts of the Transition
Copyright © 2014
McGraw-Hill Ryerson. All
Selling the Business to Outsiders

Going Public

Private Placement
Closing Down or Going Bankrupt

Closing Down

Business Bankruptcy