To ensure that your business passes to your ideal successor, carefully craft a business succession plan that clearly articulates who will eventually get the business, sale price, purchase terms and possible trigger events.

A successful business succession plan outlines who, how and when your business will pass to another person or company when you retire, are disabled, or pass away. Most plans involve a buy-sell agreement, secured with life insurance or a loan. Below are the five most common steps to writing a succession plan:

1.   Choose the type of plan based on your transition timeline

Nearly everyone needs a death or accident succession plan, in the event of the owner’s death or disability. If you are within several years of retirement, you may also want an exit succession plan to help you transition ownership of your business on a specific date.


2.   Determine your successor

Arguably the most important part of succession planning is figuring out who will take over. It could be a co-owner, family member, key employee, or outside buyer.


3.   Formalize your standard operating procedures

It’s important to write down and formalize your day-to-day functions and your standard operating procedures for the business. These may include an organization chart, operations and IT manuals, employee handbook and training, performance and skills enhancement procedures.


4.   Value your business

Figure out the value of your business early and regularly. It’s important to accurately value your business.  Misjudgments here can snowball into financial errors when planning for retirement.


5.   Fund your succession plan

Since few buyers have enough liquid cash to pay for a business upfront, you’ll need to specify how the buyer will purchase your business – loan, installment payments, or another option. The last thing you want is to reach your retirement or trigger date and find out your chosen successor can’t afford to buy your business.



Why AXA?

Expertise in a complex business area
With AXA, you have access to professionals who understand the needs of small business owners and can help you put a plan in place to ensure that your business passes to the successor of your choice.

Financial strength to fulfill our promises
AXA Equitable Life Insurance Company and MONY Life Insurance Company of America, premiere providers of life insurance and annuity products, have been helping individuals reach their most important goals.

Wide range of product to fit your needs
AXA has a range of permanent life insurance products and riders that can be utilized to tailor your Buy Sell Agreement or fulfill your business succession needs

Next steps

Want to find out more? Fill out the form below. You can also call 844-4-BIZINFO (844-424-9463) to schedule a time to work together on customizing a strategy to meet your specific needs.

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AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. (AEFS). "AXA" is the brand name of AEFS and its family of companies, including AXA Equitable Life Insurance Company (AXA Equitable) (NY, NY), MONY Life Insurance Company of America (AZ stock company, admin. office: Jersey City, NJ) (MONY America), and AXA Distributors, LLC. All group insurance products are issued either by AXA Equitable or MLOA, which have sole responsibility for their insurance and claims-paying obligations. Some products are not available in all states.

AXA Equitable and its affiliates do not provide legal or tax advice, clients should rely on their own advisors on these matters.

Life insurance products are issued by AXA Equitable Life Insurance Company or MONY Life Insurance Company of America (MLOA), an Arizona Stock Corporation with its main administration office in Jersey City, NJ and are co distributed by affiliates AXA Network, LLC and AXA Distributors, LLC. When sold by New York State-based (i.e., domiciled) Financial Professionals, life insurance is issued by AXA Equitable Life Insurance Company (New York, NY.) 

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this article is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transactions) or matters) addressed, and you should seek advice based on your particular circumstances from an independent tax advisor. Neither AXA Equitable, MLOA, AXA Network nor AXA Distributors provide legal or tax advice

GE-136226 (04/2018)

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