Business succession is the planning and process of preserving the continuity of the family business. If the goal is to have a business continue, the business owner cannot simply hand the keys to the successor and walk away. For most businesses there are two main planning elements, the management of the business and the assets of the business. The optimum succession plan is approached as a long-term process that requires planning, communication, teamwork and re-evaluation during the process.
The succession plan often addresses some or all of the following items:
- Development, training, and support of successors.
- Delegation of responsibility and authority to successors.
- Outside directors/advisors to bring objectivity to the process (when necessary).
- Maximizing retention of key employees through equitable compensation planning for management, family/non-family employees, and active/inactive shareholders.
- Coordination between who will own the business and who will manage the business.
- Consideration of the best interests of the business and the owner’s family.
- Timing of a transfer of the business during your lifetime. This may provide you with the opportunity to consult with the successor(s), and generally reduces the risk of a discounted sale of the business.
We understand the competing interests between the business and the family relationships. Our goal is to work with our clients and their families to design and implement a plan that works for their specific circumstances and gives the business the best chance to transition from one generation to another.