SMALL BUSINESS MANAGEMENT

1
SMALL BUSINESS MANAGEMENT

• Chapter Fifteen
• Managing the Transfer of the Business

2
Managing the Transfer of the Business

• Long Range Planning
• Alternative Outcomes for the Business
• transferring ownership to heirs
• selling the business to outsiders
• closing down the business or declaring bankruptcy

3
Transferring Ownership to Heirs

• Potential Problems in a Family Business
• high emotional level
• blurring of roles
• incompetence
• non-family employee attitudes
• objectives of family owners

4
Planning for Succession

• 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

5
Principles of Success for Family Businesses

• Draft a succession plan
• Recognize the importance of objectivity
• Create clear role structures
• Ensure competence
• Provide incentives for non-family employees
• Clarify objectives of family owners

6
Selling the Business to Outsiders

• Going Public
• Private Placement

7
Closing Down or Going Bankrupt

• Closing Down
• Business Bankruptcy

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Concept Checks

• 1. What are some methods of transferring ones
  business to ones children?
• 2. What is the importance of capital gains in
  this transfer?
• 3. What are the unique problems of a family owned
  business ?
• 4. Why is the emotional level higher ina family
  business ?

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Concept Checks

• 5. What can be done with an incompetent family
  member employee ?
• 6. What can be done to prevent nonfamily
  employees from leaving the business ?
• 7. Why is it important to set long-term goals in
  a family business ?
• 8. How can family succession be made easier ?

10
Concept Checks

• 9. Why is open communication so important in a
  family business ?
• 10. What budget change has effected the selling
  of a small business ?
• 11. How do you know if your company should go
  public ?
• 12. What is the priority order for creditors in a
  bankruptcy case ?