Is Succession Complicated and Can We Help?

by Sue Moore

Years ago, it may have seemed easy to have your children take over your business or to have a smart employee just step up and buy the business. Is it more complicated than that today?

Recently, we attended an all-day Family Business Symposium at Penn State University. Don Moore was the keynote speaker, but the day was filled with other trusted advisors who had great advice on the subject. It was a delight to meet and connect with all the other knowledgeable speakers who are trusted advisors to their clients.

Who are trusted advisors and what can they do to help you through the decisions that need to be made before you step away from the business you have known perhaps all of your life? Succession is one of the hardest decisions ever made by a business owner. You want to leave a proud and profitable legacy to your family, your employees and your community. What is the best way to do that?

First, you need to be sure you are ready to step back. Many questions circle in your head: Are your kids ready? Do they know what they need to know? Is it better to sell? If you don’t have children in the business, what should you do with it? When is the right time? How can you transfer all the knowledge that only you know? What would you do afterwards?

Next, who are the trusted advisors who can help you with this transition? At the symposium, there were bankers, attorneys, accountants, wealth management advisors and consultants. Each is an expert in their field and have knowledge that can be used by all business owners.

Finally, who is the right advisor to join your team?  Explore your options but you will find that you will use all of them at some point along the way.

  1. Attorneys. Yes, it all needs to be done in a legal manner, whether gifting through your estate to your family or selling it to your children, another party or a partner. There are so many options available and legal issues can be daunting. Choosing the right attorney that you are comfortable with is important.
  2. Accountants. If and when you dispose of your business, you want the best possible price. An evaluation will need to be done. Sometimes, your company isn’t worth what you hoped, but other times, with a little help, it can also be worth much more than you anticipated. A good accountant can help you identify opportunities to increase value.
  3. Bankers. They know your banking history. What loans need to be paid? Does everything need to be paid at the closing or can my children or partner take them over? They are happy to assist and manage the wealth after the sale.
  4. Wealth Managers. Once the sale has been completed, how do you invest the proceeds to carry you through retirement? Do you want to travel, buy a second home, invest in your grandchildren’s education fund, or just have a great time and spend it all?  Strong advice on investments is critical.
  5. Consultants. They are the ones who can pull it all together for you. They understand the risks that you have taken in your lifetime to be successful. They know what it takes to make a transfer to your family or an outside buyer. They can help bring the whole advisory team together to make the best recommendations for you. Then, after everything is said and done, they can help you with your personal transition. Yes, it will be a big change for you, it could be exhilarating or depressing, and you may need someone to assist.

Decision Associates has been helping with succession issues for over 30 years. The methodology we use has been proven effective time and time again. Whether we are using assessment tools to test your children’s abilities, assessing the business for improvements that should be made before a sale or interviewing the potential owners, and yourself, we can assist with this most important decision in your life.

The Family Business Symposium was enlightening, informational and consistent with the way Decision Associates approaches succession, exit planning and continuation. We can help your advisory team make the transition as easy as possible for you.

For more information on the symposium or to seek some guidance on your upcoming succession/continuation planning, give us a call at 814-240-0101.