business woman standing in office discussing succession planning

Succession Planning Basics: How to get what you want for your business

Succession Planning Basics: How to get what you want for your business

3 Minute Read

Knowing what you need and what your options are is difficult to do on your own and often the reason business owners fail to plan for their own exit.

National Team Leader, ExitSmart

The process of planning for succession can be fraught with practical and emotional stumbling blocks. One of the key challenges is knowing what you need and what your exit options are, on your own. This is often the reason business owners fail to plan for their own exit.

The following is an example of the succession planning steps a business owner went through before fully engaging in the exit strategy process.

Jordan* had owned her design-build business for 16 years. As an architect and business founder, she was accustomed to building things from the ground up – and that included her business. In recent years, Jordan’s business had grown steadily due to her solid estimating processes and the addition of some key hires and award-winning designs. Now, with a team of 20, Jordan was finally able to get time to think about what’s next. 

She attended a session on succession planning and booked a follow-up consultation with a business advisor. Jordan was excited about the process, but kept rescheduling meetings. Several months later, through various conversations, it became apparent what was happening: Jordan felt unprepared to exit her business – she didn’t have the answers, and really wasn’t entirely sure what she wanted or what the options were. Building a business strategy was easy for her, but letting go was tough to think about.

For example, when asked for a copy of her will or power of attorney, Jordan scrambled. She hadn’t updated her will for at least 15 years, and since it was dated, she didn’t want to provide it. Jordan worked with her lawyer to update her will, but couldn’t decide on an executor, and had mixed feelings about which of her employees would be listed in her will (hence the push back in meeting date yet again).

Make a commitment to the succession planning process

Business transitions are complex, both financially and emotionally. It takes time and knowledge to build and execute a succession plan that will work for your unique situation. A succession strategy isn’t one-size-fits-all – it is a process of asking the right questions to allow you to get to the solution that is right for you. 

Once Jordan got comfortable with being uncomfortable, she was able to start working with her advisor through the questions and process of developing her succession plan. She gained clarity that her company had allowed her to build significant retirement funds outside the business.

Her advisor identified an ideal exit plan that involved a small group of employee shareholders and three-to-five years of mentorship/transition of ownership where she could continue to work two days per week for the business. 

Jordan ended up changing her previous will but after clearly seeing what her transition plan was, the updates were easy.

What is successful for someone else may not be the right approach for you. Maybe you want to sell to a new owner or transition leadership to a family member. Each succession plan should be customized to what the business owner needs from their business and what their goals are. Not knowing which step to take next is common, but working with an experienced advisor will help ensure the path become clear as your succession plan evolves.

Download your Succession Checklist

After pouring so much into your business, you deserve to be in control of how you exit. Download your checklist to ensure you set your own terms.

Dig deeper to understand what you want and how a succession plan can get you there

Quick questions often result in incomplete answers. Business owners who move quickly in the direction they think is best for their business operations often find the destination isn’t what they expected. Paul’s* experience of seller’s remorse is a clear example.

Paul started working for the business he would later buy from his boss at the age of 20. By 30, he had paid off the debt from the purchase, and within a decade, had built a sizeable electrical contracting business that was attractive to not only employees but competing companies alike.

He discussed succession planning with his accountant who moved to position the business for sale. The financials were perfect, market conditions were strong, and the tax structuring ideal. Paul made more money than he ever dreamed on the sale of his business, but as he was in the lawyers’ office signing paperwork, he was suddenly overcome by sadness and panic. No one expected this and he chalked it up to stress of the sale and excitement of it all. 

After two years of soul searching, Paul started another business, but always regretted selling the original business. While the price was right, for Paul and his team, the timing and the buyer was wrong. Paul hadn’t been personally ready to retire and although he got the money he wanted, plus more, many of his key team members left. The business deteriorated and lost its stellar reputation because of the management decisions made by the buyer.

Some could say that doesn’t matter, he got paid, but Paul dreamed of other options that could have occurred with a bit more time and a few more questions from his advisors.

Know before it's time to exit your business

Spend some time imagining what an ideal outcome for you would be on selling your enterprise, including what you want and need from your business. If it’s just an after-tax dollar, that’s fine. But for many, the ideal outcome is a combination of financial value, a measure of security for employees and customers, a role and title on a business card, a percentage of ownership, and a gradually decreasing amount of daily involvement. 

The many layers of succession make it critical to examine what you really want and how you expect to get there. Just like creating a business plan, a successful succession requires you to think big and plan ahead. Consider all your available options and be accountable to key steps along the way. An experienced advisor who is truly in your corner will be critical.

For many business owners, the sale of their business will be the most important decision they ever made. Seek advice from a knowledgeable, unbiased advisor, and review your options before committing, so you can ensure the outcome you want.

*Characters are based on composites of MNP clients

Contact us

For more information, contact Lynne Fisher, National Team Leader, ExitSMART™.


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