Business Succession Planning

A business often represents a lifetime of work and vision. However, despite almost three-quarters of business owners wanting to transfer control or exit ownership within the next decade, barely a third has a formal succession plan in place. Lack of a plan is the most common reason family businesses fail to survive first-to-second generation ownership.
Leaving business succession to chance could allow someone else to decide what happens to your business, potentially at significant cost.
Planning early may help ensure a smooth and successful transition of the business to the new owner or owners, as well as reduce the tax impact of ownership changes. A successful plan may also help enhance the overall value of your business today.

The Succession Planning Process

The process of planning and enacting a successful transition consists of several steps, each of which is equally important. These steps include:

Identify and Review Priorities

The first step of the process starts with identifying your priorities. Business owners should ask themselves, “What do I want for my future, my family, and my business?”

Identify a Buyer or Successor

Who will run the business when you are no longer doing so?

Develop a Succession Plan

Since a variety of expertise is needed, it is important that you work with an appropriate team of experts to help you develop your business succession plan.

Integrate with Personal Financial Planning

Ensure that your personal retirement and estate goals are integrated with your overall financial plan.

Monitor Plan Implementation

It is important to monitor and review your plan during the implementation period to ensure that you are on track in terms of timing and deliverables.

Elements of a Succession Plan

Succession planning does not take place in isolation from the larger issue of your overall financial security. An effective succession plan will examine all aspects of your financial situation.

Distribution of Ownership

If you are contemplating transferring ownership of your business in the future, a shareholder agreement is a key tool that should be considered.

Selecting and Grooming Your Successor

Identifying the right person to take over the reins when you leave is a process that requires careful thought and planning.

Business Maximization Strategies

There are many strategies you should consider to increase the value of your business prior to sale or transfer of ownership.

The Role of Key Employees

Key employees are vital to the success of ownership transition, and can offer real help in the planning process.

Business Valuation

While you may have a good idea of what your business is worth, you should still consult with a professional business valuator to confirm or determine this crucial figure.

Financing and the Mechanics of Sale

Financing the change of ownership should be a key part of your succession plan.

Taxation and Legal Considerations

It is important that you consult with your tax and legal advisors early in the process to make sure that your plan achieves your objectives.

Retirement and Estate Considerations

Since your investment in your business is probably your most significant asset, there are a number of important retirement and estate planning issues that should be addressed.


When you develop your plan, you should ensure that there is a clear timetable, so those involved know exactly what will be expected of them, and when.

Monitoring Process

Be sure to update and adjust your plan as necessary if and when there are changes to your business and/or personal situation.

Contingency Considerations and Risk Management

If illness or death meant that you were suddenly unavailable to manage the business, who would take over your responsibilities?
Finding the right approach to exiting your business will depend on your own expertise, the complexity of your personal financial situation and the time and desire you have to manage your transition. Whatever you do, don’t go it alone. It’s important to get the right team working for you.

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Our clients and their families typically have a net worth of $2M or more. If you have an amount under the minimum, we still invite you to get in touch with us to discuss your options.

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