Succession Planning
What Is Your End Game Plan?
Still thinking about it? No matter how you contemplate exiting your business, it takes longer and will consume more of your valuable time than you anticipate. Exit strategies engage your business and personal finances, strategies and emotions. Your plan will have a profound impact on your family. Doing nothing is not an option. SB Partners has substantial experience in planning exit strategies for principals in family owned businesses, privately held companies and partnerships to minimize their departure obligations, maximize their cash positions and provide practical solutions for the inevitable taxation issues. We have a respected reputation for working in harmony with your other professional advisors throughout the process. We deal with any ownership transition issue that may surface, common or uncommon. It all starts with defining your needs.
Not ‘What If?’ but ‘When?’
You will exit your business. It's inevitable that someone other than you will own and run your business in the foreseeable future. The question is “When?”
You may not suffer a serious illness or accident that will prevent you from running your company, but in life there are no certainties. Ask yourself these questions: Who could run your business effectively in your absence? Do you already have someone in mind? Are they ready? Sudden death or disability can throw your company’s operation into immediate disarray.
You may have identified a candidate, but unless there is a financial, management and operational plan in place the transition may not happen as you dreamed. You could experience frustrating delays and surprises.
Make It Part of Your Risk Management Activity
There are different kinds of transition scenarios. Voluntary transitions are usually orderly—they maximize your business value and minimize your exit stumbling blocks. Then there are involuntary transitions, characterized by hasty decisions, fewer options and disadvantaged business valuations. By including succession planning in your annual Risk Management review you will clearly identify your exposure and be able to weigh all options that will allow you a smooth exit. Leave a proud legacy in place for the next generation of management. At the extreme, there are unforeseen transitions. Bad things happen. In the absence of a succession or contingency plan you or your survivors may be forced to liquidate the business. You can almost be assured that the net realized value will be disastrously low.
How We Can Ease the Transition Pain
Succession planning is a process, not an event. In developing a plan, both you and SB Partners need to have a clear understanding about where the organization, your current needs and your mindset are now, where you want to be at a determined time in the future, and then work out how to bridge the gap between the now and the end date. That becomes your exit plan. We deal with assets, finance, people, emotions and you. We help you ensure that there will be sufficient liquidity to pay the taxes due when ownership is transitioned so as not to hamper operations and reduce cash flow or ultimately reduce the value of your company. We begin with no bias, no preconceived ideas and no agenda. Just clear objectivity and understanding realized by having done this many times before. We can ask the tough questions. We can initiate the difficult discussions. We can act as facilitators in meetings where emotions may run deeper than common sense. Where family members will not or are ill-equipped to assume the leadership role, we can step in and work through these difficulties, often with the input of other specialized professionals. During family disputes that can arise we will, together with other professionals, help to resolve distracting and potentially toxic disagreements. Whether you transition the business leadership to a family member or the current management team, or you sell it to a stranger, the joy of freedom will be mingled with the inevitable pain of separation. You will experience bumps in the road along the way out. Let us help you make the ride as smooth as possible. Typically the stepping stones are:
- Strategic business planning
- Business financial planning
- Planning for the unforeseen - contingency planning
- Liquidity planning
- Exit options
- Managing all the other stakeholders, government agencies, customers and suppliers
- Business valuation
- Family protection - Updating wills and other critical documentation in sync with evolving family situations
- Critical succession milestones
- Tax planning
- Trust planning
- Charitable gift planning
- Stringent successor management selection, including family members
- People planning
- Retirement and your lifestyle planning
- Personal wealth management
- Legal issues
- Transfer of management and organizational development
- Ownership transition and letting go
- Transfer financing
It’s All About You
Tell us what you want, where you envision yourself at the end of this process, what drives you, and how you wish your legacy to be structured. You may have to do it just once, but we have done it hundreds of times. Let us help you clarify your wealth transition objectives; identify and address issues that will arise; and develop, communicate and implement plans to achieve the most comfortable exit possible from your company.
