Ending Soon! Save 33% on All Access

Use Make-a-Will Month to Plan Your Small-Business Exit Strategy Your business plan should also take into consideration what happens when you are no longer here.

By Susan Solovic Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


August is National Make-a-Will month, and it should serve as a reminder for small-business owners to have their succession plans in place.

Often it's hard enough to coax small-business owners into writing an initial business plan when they're starting out, so it can get even more difficult to make them seriously consider putting a plan in place for their end game.

Sadly, the consequences can be disastrous. For example, my parents owned a small business and intended to sell it to a key employee. It would have been the ideal situation. However, they waited too long, the employee left and became a competitor. Illness struck my family and eventually they were backed into a position where they were forced to sell. Consequently, they sold for pennies on the dollar.

Succession plans differ wildly and perhaps a will is not the best legal vehicle to handle your small business. There's no doubt that you will need some professional advice to finalize your plans, but here are a few concepts to get you thinking about the subject.

Living trusts for small business

Living trusts can be the right way to go for some small-business owners. Small businesses often have assets that fit into a living-trust arrangement quite nicely. For example, many small businesses own property and living trusts are often used in this situation. Further, some small businesses will own patents and copyrights. Again, establishing a small business living trust can be the right strategy.

Related: 10 Businesses to Start That Can Weather Any Economy

Sole proprietorships, partnerships and closely held corporation interests can generally be transferred to a living trust fairly easily. However, if you're involved in a limited liability company (LLC), you'll need a majority of the owners to agree. Please get a good estate attorney to go over all your options in detail.

Also, if you have a small business that operates in more than one state, going the living-trust route can spare your heirs the hassle of dealing with probate courts in different states.

Establishing a trust generally means that you plan to pass ownership of your small business interests to your heirs. However, many small-business owners are best served by selling their businesses as they are approaching their retirement years. Often family members don't want to continue the business.

Selling a small business

I hope that the story I told at the top made an impression on you. If you plan to sell, you need to have that goal on your mind and be working on it for many years prior to your retirement.

To put it simply, you need to build value and find a buyer. Fail at either of those to items and you're out of luck. And while it's fine to fail at a few startups when you're younger, it's tragic to fail at achieving a successful small business sale when you're older.

So take National Make-a-Will month as a gentle reminder to be actively planning your exit strategy. You'll be extremely glad you did.

Related: How the Gay Marriage Decision Affects Every Small Business

Susan Solovic

THE Small Business Expert, Award-winning entrepreneur, New York Times bestseller, keynote speaker, media personality and attorney.

Susan Solovic is THE Small Business Expert.  An award-winning entrepreneur and Internet pioneer, she founded one of the first video-based websites and grew it to a multi-million dollar enterprise.  The company was recognized as the Best Investment Opportunity in the Silicon Valley in 2006 by a venture forum group.  She is a sought-after keynote speaker, New York Times bestseller, media personality and popular blogger.  Her experience provides her with a unique vantage point from which to inform and inspire entrepreneurs around the globe.


Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Did OpenAI steal Scarlett Johansson's voice? 5 Critical Lessons for Entrepreneurs in The AI Era

Did OpenAI steal Scarlett Johansson's voice? OpenAI has since paused the "Sky" voice feature, but Johansson argues that this is no coincidence. In response, Johansson delivers a masterclass for entrepreneurs on navigating the AI era successfully.

Business News

Apple iPhone 7 Users May Be Owed a Slice of a $35 Million Settlement — Here's How to Claim Your Share

Previous (and current, no judgment) iPhone 7 users may be entitled to up to $349. The deadline to file a claim is June 3.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.


How Corporate Investment Helps Startups Deploy Technology Faster Than Ever

Financial resources, strategic alignment, access to expertise, market validation and operational support make this deployment possible.