- Small Business Owners > Business Transition Strategies
Business Transitions
As in personal life, a business evolves through many transitions over time. From start-up, through sole proprietorship to corporation, owner retirement, business succession and wealth transfer, each step involves different strategies to create wealth, reduce or defer taxes, reduce risk, take income and ultimately to extract retained business wealth.
At Transitions Wealth Strategies we guide the small business owner through the strategies appropriate at each transition of their business. We understand that the business owner’s vision and expertise lies with their business’ core strengths; it is our task to present simplified business strategies to build and protect the business wealth.
A piecemeal approach is often worse that having no plan at all. As such, we normally create a comprehensive “Business Transitions Plan” that covers the transitions, the goals and the strategies to be implemented at each step of the way. No plan is ever static; we continue to monitor the plan to ensure wealth creation is maximized as time goes on.
At Transitions Wealth Strategies we take great pride in offering these services to small business owners. We are humbled by the value a business owner gains from our mentorship. We are passionate about their entrepreneurial spirit and are often in awe of the business value that we are able to create together.
Following are some excerpts on some of the strategies we employ as you transition through stages in business life as a small business owner.
When to Incorporate
When you first take that leap to follow your entrepreneurial passion, the simplest and most effective business structure is "sole proprietorship" either on your own or with one or more partners. You work long hours to build your business and make many sacrifices along the way based on your belief in the product or service that you are offering. Soon after, the successful business will start to generate income that is used to build the business and support your personal lifestyle needs. At some point, as the business grows, the question arises ... should I incorporate? More Info..
Shareholder Agreement
As your business transitions from sole proprietorship to corporation it is important to develop a Shareholders’ Agreement early on when relationships are sound and all the shareholders are on good terms. This applies whether your partners are other family members or simply business partners. More Info..
Business - Creditor Protection
Although credit and liability issues are never planned events, it is important that contingency credit protection plans are in place to protect the business owner and his family should such an event occur. Many business owners don’t realize that their personal assets are at risk for creditor claims should something go wrong with the business. Small businesses are particularly at risk in their early years as human capital and financial reserves are limited. More Info..
Business - Taking Income
As a sole proprietor, business income is used in conjunction with other sources of personal income to support your family and your personal lifestyle. Some of the business earnings are used to build the business but for the most part the business income is consumed satisfying the needs of everyday life. At this stage of business transition, the income the business is generating is merged and taxed at the business owner’s personal marginal tax rate. Transitions Wealth Strategies primary role is to assist the business owner with tax efficient expense planning so as to minimize the taxes paid. More Info..
Business - Tax Planning
Being a small business owner presents many opportunities for the implementation of strategies to defer, reduce or eliminate taxes. Effective tax minimization strategies will prevent the wealth created by your business from being eroded by taxation. More Info..
Business - HOLDCO and Family Trusts
As your business matures, the successful small business owner should be thinking about tax efficient wealth accumulation, succession and estate planning goals and strategies. Creation of a Holding Company or Family Trust may facilitate this planning. More Info..
Business - Financing Retirement
As a small business owner, you must be visionary enough to plan and fund your own retirement. Small businesses don’t have Company pension plans. No one else is going to do it for you. Aside from your personal RRSP savings, the value that you have built up in your business will likely be your only other significant asset. More Info..
Business - Succession Planning
Your business is a source of esteem. It is your life. You don’t want to think about the day when you will no longer be running the business. Unfortunately, there is an old saying ... "If you fail to plan, you plan to fail". It takes time to develop an exit strategy, particularly if it involves grooming a successor, so you need to start planning long before you plan to leave the business. More Info..
Business - Estate Planning
You have looked after financing your retirement; you have formulated your business succession plan. The third planning step is to integrate your business estate plan with your retirement and succession plans in conjunction with your personal estate plans. The goal is to plan an organized, tax efficient transfer of your remaining business and personal wealth to your loved ones. More Info..
