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Business Succession Planning

Entrepreneurs are the engines of growth in this country.

 As entrepreneurs and business owners, we know what it’s like to work relentlessly to achieve dreams, to deliver value to clients and customers every day of the year, to sacrifice immediate income with the goal of creating long-term wealth and financial independence, and that failure is just as likely, and in some cases more likely, than success.

 We also know that success is accompanied by some of the most complex and challenging questions
a business owner will ever have to answer.

Questions like:

  • I realize that for years, my identity has been defined by my business, by my role within the business, and by the success of my business. How do I work through the process of separating my identity from my business, so that I can exit my business and start the next chapter of my life?
  • I am apprehensive about moving from a situation in which my financial well-being is based on something I’m intimately familiar with and have a high degree of control over, to a situation in which my financial well-being is dependent on an investment portfolio, something that is unfamiliar to me and outside of my control. How do I make this emotional transition? How can I find the peace of mind that will allow me to sleep well at night?
  • I know that at some point I want to exit  my business, but I’m not sure how much value I must extract from it in order to do the things I want to do after I exit. How can I determine what my exit goals should be, both in terms of timing and money, so that when I do exit, I’ll have the confidence to pursue the vision I have for my post-business life?
  • I run a family-owned business, and would like to keep it in the family after I exit. But I also recognize that only about 25% of family-owned businesses are successfully passed on to the next generation. How do I ensure a smooth, successful business transition within the family, while at the same time, meeting the financial requirements I personally have?
  • I want to spend at least some of my time as a philanthropist after I exit. But I’m not sure which vehicles I should be considering prior to my exit. How do I define my philanthropic vision before I exit? Which vehicles should I include as part of my pre-exit and post-exit plan?

These aren’t just trivial questions.

Business owners typically have most, if not all, of their wealth tied up in their business.

Business owners have one shot to capture it.

Very few of them will get the professional financial advice they need, prior to their exit.

The problem for most business owners is the fact that financial advisors are eager to work with a business owner after the owner exits the business and has a liquidity event, or in some select cases, immediately prior to the liquidity event. It’s a simple profitability judgment by the financial advisory community. Their philosophy is “Who wants to spend time with a potential client when the possibility of an exit could be significantly delayed, or the value severely diminished prior to the actual exit?”

Unfortunately, this approach forces entrepreneurs to make some of their most important decisions
without the help of a professional financial advisor.

As a result, potentially attractive strategies using legal vehicles such as Grantor Retained Annuity Trusts (GRATs), Private Foundations, Charitable Remainder Trusts (CRTs) and Charitable Lead Trusts (CLTs), are foregone, to the detriment of the entrepreneur and their family (and charities if the business owner is so inclined).

If the liquidity event is a public stock offering, often the business owner retains a significant portion of the company’s shares, and must evaluate the various tools used to hedge the risk of the concentrated holding without affecting an outright sale of the shares (which would be viewed negatively by the public markets).

The worst part is this, however:

Working with a financial advisor prior to an exit can help the business owner see,
and get comfortable with, the next chapter of their life.

In other words, having a strong financial plan in place prior to the exit

makes selling the business less emotional and more rational.

Entrepreneurs and business owners work exceptionally hard to create long-term wealth.

You deserve a financial advisor that shares your long-term approach to planning and relationships.

If you want to learn more about the importance of business exit planning, find yourself asking any of the above questions, or have your own questions about exiting your business and would like answers, we encourage you to call us. We look forward to hearing from you.

If you’re not ready to contact us but would like to learn more about the complexities and emotional challenges of exiting a business, we encourage you to review the following resources:


  • Deciding to Sell Your Business: The Key To Wealth and Freedom, by Ned Minor
  • Exiting Your Business, Protecting Your Wealth, by John Leonetti
  • Family Business Succession: The Final Test of Greatness, by Craig Aronoff, Stephen McClure, and John Ward
  • Exit Strategy: Maximizing the Value of Your Business, by Thomas Lyons