Succession Planning for a Business    Services List

Definition:
The process by which a business owner plans for the successful transition of their business investment in order to maximize its value.

Benefits:
Maximizing the return on investment for the largest component of one’s personal assets, estate, and life’s work. By planning for succession you increase its liquidity and marketability.

Process:

• Discuss with the business owner which succession strategy is most likely to occur.
• Estimate potential value of enterprise.
• If anticipated value is not sufficient, determine plan of action to increase the value (business development planning).
• Analyze current tax effects of the succession strategy to estimate best structure under current tax code.
• Determine what, if any, organizational or management structure changes are needed to facilitate the sale.
• Monitor semi-annually to annually.

Case Example:
A manufacturing company, already in its second generation, was concerned with the transfer to the next generation. The client wanted the business to be transferred to his son but not at the cost of excluding the other children from his estate. We assisted the client in identifying the qualities and specific knowledge bases required to manage the business. After measuring these requirements against the son’s skills, a personal development plan was created for the son. A non-family mentor was appointed to help the son implement his development plan. It is monitored on a quarterly basis. The assessment of the business helped identify the need for an updated business plan, among other things. After two years of implementing the succession plan, some areas of responsibility have already changed hands. If the client dies, the son will be given the opportunity to inherit part of the business and purchase the remainder. The client’s goals and objectives are being met. Hopefully the continued growth in the personal development plan will ensure the ongoing success of the business.