Thinking about handing over the reins to your business? These considerations will help you create an effective and tax-efficient succession plan.

There are many benefits to being your own boss, both while you’re running your business and when you’re ready to step back from it. Because you’re in charge, you may have greater flexibility around when and how you decide to retire, and you can decide whether to pass on your business to a family member or sell it to a complete stranger.

Whether you’ve built your business from scratch on your own, you have one partner or you are part of a corporate partnership with several different business owners, there are a number of considerations to take into account when the time comes to hand over the reins to someone else.

Take your time

Think long and hard about whether you want to retire totally, or work part-time. Do you want to sell your business or give it as a gift to a family member? “It’s not a snap-your-fingers approach,” The best approach is to open a broad conversation with your financial advisor and let him or her customize your succession planning around your unique business and family needs. Consideration for your employees can often also be factored into the mix.

Make a plan

A solid financial plan is the cornerstone of successful succession planning. If you intend to sell to a non-family member, you’ll need to clean up the balance sheet and get a valuation on your business. Weighing the merits of an asset sale vs. a sale of shares is paramount when tax planning, because only a sale of shares will give you access to the lifetime capital gains exemption, says Poole. If that’s what you decide to do, make sure all the necessary papers are in order for your business to become a Qualified Small Business Corporation.

Look into ways to minimize tax

Under the right circumstances, the ability to make a gift of business shares to your children by using a share freeze and an Income Tax Act rollover could prove very favorable. This strategy – which is best followed with professional advice – can let you sell your business to your children and take back a preferred set of shares that can give you a regular income in retirement and defer triggering capital gains tax. In the future, you can bequeath any remaining shares in your will and cover the cost of the known capital gains with corporately owned life insurance.

Get customized solutions from the professionals

There are other ways to minimize taxes when selling a business. Make sure you work with a financial advisor, accountant and lawyer to address tax efficiency and to determine if the owner and possibly additional shareholders inclusive of family members can access the lifetime capital gains exemption ($824,176 per individual in 2016). Since each entrepreneur’s business is different, each situation will require customized solutions. Important areas to consider for your business are corporate structures, family trusts, wills and powers of attorney.

Talk to others

A number of resources are open to entrepreneurs to discuss what should be included in a succession plan, says Fitzgerald. It’s very important to engage a professional team quarterbacked by your financial advisor and including your lawyer and accountant to ensure you have a comprehensive plan that addresses all aspects of the transition. Information is also available from business coaches and even peers in the industry. You could also get advice from a long-time mentor.