
Small Business Owners - Greater St. Louis Area
Family-owned and small businesses remain the backbone of the American economy. About 98.5% of businesses in the Greater St. Louis Missouri area are comprised of small business owners with less than 500 employees. Unfortunately, family businesses tend not to outlive their founders. According to the Advocacy for Small Business, over 25,000 opened and over 19,000 closed. Family-owned businesses rarely survive to the third generation. The failure to thrive and survive to the next generation might fall to a failure of succession planning. Creating a strong business succession plan is crucial for small business economic transfers and to family owners.
Why family businesses do not survive
Why such a dismal success rate of generational succession ownership? The reasons are as varied and unique as the businesses and business owners. Many of the failed transfers can be traced to three causes: people, taxes and cash.
Family business owners and estate planning
The family element in every family business can mean the difference between its success or failure during the transfer process. The retirement, disability or death of the business owner are all common events that can trigger a business transfer.
Tough questions must be asked and answered. Otherwise, a business that took decades to build can be destroyed overnight.
For example, who will run the business after you? Will it be your spouse, one of your children, or a key non-family employee? If your spouse does not run the business, will he or she still be financially dependent on it? Will a buyout provide financial security for a surviving spouse or family member?
What arrangements have you made for the inheritance of your children who are not active in the business? Have you in-law proofed your estate?
What provisions have you made to pass on your business legacy to children or even to your grandchildren?
A business succession plan is a major piece in your estate plan.

Coordinating Financial and Estate Plans
Sheri is a team player with your CPA and financial advisor. Keeping your Operating Agreement is extremely important and plays a major role in your estate planning. If your financial and estate plans are not carefully coordinated, there may not be enough cash to fund your objectives. An appropriately-funded estate plan can meet all of your people-planning objectives and provide liquidity for estate taxes (and business debts). Life insurance, owned in the proper amount, type and manner, may be effectively used to fund such money matters.

Sources
- U.S. Small Business Administration Office of Advocacy
- Small Business Ownership
- Conway Center for Family Business: Family Business Facts
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