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RBC Bank: Baby Boomers Taking The Plunge Into Succession Planning

 

Raleigh, N.C.. - May 18, 2011 – The Baby Boomers, born from 1946-1964, have always made an unmistakable mark on our society. In 2011, the first Boomers turned 65, and officially became eligible for Social Security. There are a lot of Boomers coming right behind this first wave, as roughly 76 million kids were born in the United States during those post-WWII years and into the early 60s.

That means a lot of Boomers are about to make a big splash in the business succession pool.

It’s a fact that many of today’s small business owners are members of the Baby Boomer generation. And whether they are at the leading edge of the aging wave in their mid-60s, or relatively younger in their later 40’s, it’s not too soon for them to start thinking about what happens to their business when they want to retire -- and how to best maximize and monetize the assets built over years of hard work.

To make that transition smoothly requires planning –- and a willingness to honestly evaluate the business – its strengths and weaknesses. If you are one of the Baby Boomers thinking about taking steps away from active management of your business, there are five actions you need to take first to shape a solid business succession plan:

  1. Involve your staff. When you engage your employees in the succession planning process, you establish a sense of responsibility and ownership. This can help boost morale and spur staff members to renew their commitment to the company.
  2. Consult the experts. Make sure you work with a reputable attorney, financial planner and tax professional to help you examine ownership, valuation, and tax issues with an objective eye.
  3. Find tomorrow’s leaders. The future of your company depends on the strength of the leadership you put in place. Identify those with the skills and attitude that will help the company grow, then groom them for leadership positions.
  4. Don’t forget your values. As you develop your succession plan, make sure it’s in line with the company’s core values, key competencies and positions, and performance goals.
  5. Define your role. Will you hang around after new leadership takes over? Will you continue to draw a salary? What will your compensation package look like? The answers to each of these questions will have a direct impact on future operations, so take time to define your role now.

Your bank can be an important partner for you as you take these steps in developing a sustainable and profitable succession plan. RBC Bank’s Small Business Banking experts are available to talk through your questions and to offer you resources along the way.

This article is provided by RBC Bank. The information included in this article is not intended to be used as the primary basis for making financial decisions. RBC Bank does not provide tax or legal advice. Please consult your own financial, tax or legal advisor.

To request a seminar on Small Business topics, contact your local RBC Bank branch.

About RBC Bank

RBC Bank, headquartered in Raleigh, N.C., offers a wide range of financial services and advice to individuals, businesses and public institutions throughout the Southeast. RBC Bank’s network includes more than 420 full-service banking centers in six states (Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia), an extensive ATM network and telephone and online banking. RBC Bank is the 40th largest U.S. bank by consolidated assets, according to SNL Financial’s List of the Nation’s 50 Largest Banks, September 2010. RBC Bank is a wholly-owned subsidiary of Royal Bank of Canada (RBC) (RY on the TSX and NYSE), Canada's largest and most stable bank as measured by assets and market capitalization. For ten consecutive years, RBC has been named to the prestigious Dow Jones Sustainability World Index. RBC has been listed as one of the most sustainable large corporations in the world for six years in a row, according to the annual ranking by Corporate Knights. And, in February of this year, RBC was ranked 31st in The World's Most Respected Companies by Barron's, and third among financial institutions. More information about RBC Bank may be found at www.rbcbankusa.com.