I often hear from a lot of women entrepreneurs that their “why” for their business is to build a legacy for their family.
When I ask “what does a legacy mean to you?” ; “can you define it?”
The answer is often “no”.
A business legacy is more than leaving money behind and ensuring some type of wealth for your family. It is a process that I am about to explain to you.
Let’s dive right in. . .
What is a legacy?
According to Oxford’s dictionary a legacy can be defined as :
(1) A thing handed down by a predecessor OR
(2) An amount of money or property left to someone in a will.
You may be wondering what does this mean? In order for a legacy to even take place someone (you) have to be dead. So to prepare for a legacy, you have to take these steps while YOU ARE ALIVE in order to ensure that your business legacy is passed down to your family in a way that you want it to.
How to prepare for your business legacy?
1.) You need a game plan aka a succession plan. The first thing you need to do is define exactly what your business legacy is. What is it exactly that you are trying to preserve? You need to articulate your values, morals, and beliefs. This is so important for whom you are trying to pass your legacy down to. You need to make sure they understand the mission, vision, values, and culture of the business. You also need to make sure you know who is the right fit for handling the business. Let’s be real cousin boo boo may not be the right one to appoint to be on the executive board of your company. So you need to think long and hard before making this decision.
2.) Have a team in place. You may want to train a team that is not related to you , in the event, you leave this earth, you will have a team in place to teach your appointed family members how to run the business effectively. This should be included in your game plan.
3.) Hire a tax professional. As you are preparing for your legacy you want a tax attorney on your team because they can show you how taxes can be maximized with estate taxes. This is so important if you are leaving a significant other or children solely alive. This should be included in your game plan.
4.) Get a 3rd Party Neutral aka an Executor. This the person that will be carrying out the wishes of the succession plan. Let’s face it families can get a little whacky when someone dies and money is involved. It is best to work it out NOW, who will manage the business legacy. For example who will file taxes on behalf of the business?, who will ensure everyone is in their right position regarding the business?, who will ensure all your wishes are carried out? The Executor is your right hand (wo)man when you leave this earth. This should be included in your game plan.
5.) Prepare the family. Explain to the family what your wishes are. Talk to them about what you want to happen when you leave this earth regarding the business. Ensure that the business legacy is something that your family values. Your goals and vision may conflict with what they envision. Talk about it NOW. This should also be included in your game plan.
6.) Identify who gets what. Again when someone dies things can get out of hand. It is important to identify who gets what. For example who is getting money from the business, who is the owner of the business, who is managing the business, and who gets what percentage of the business. All this is important because this is apart of the wealth you are passing down through the business.
7.) Make sure the business is in the black. It is important to make sure the business is actually profitable. It makes no sense in trying to pass down a business that is in the red. I’m sure you don’t want to add any undue burdens to your family. You need to make sure the business is sustainable, that there is a payroll and benefits system, all taxes are up to date, and the business is debt free.
Where would you include your “business legacy”?
In your WILL!
Sis, I hope this was helpful. I want to see you win and build a lasting business legacy for generations to come.
If this is your “why”, I want you to put on #BigGirlPanties and get started on these action steps ASAP. Tomorrow isn’t promised . Are you prepared to leave this world? Will your hadwork live on or will it die from your lack of preparation?
Until next time…
Your Business & Legal Strategist