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Succession Planning/Exit Strategy

If you own a business, retirement isn't simply a matter of deciding not to go into the office anymore. You've got some critical questions to answer such as...

"What happens to the business when you're no longer running it?"


"Will you have enough money to retire?"

If you plan to sell or otherwise transfer the business to a family member or key employee, relationships and emotions are even more prevalent. More than seven out of ten family-owned businesses fail to survive the transition from founder to second generation, typically falling prey either to estate taxes that use too much cash, family discord - or both.

Succession planning should be a priority for any business. Developing and implementing a well-designed succession plan is essential to a smooth exit from your ownership interest in the business.

We Help You With These Key Issues

  • What are your plans if something happens to key owners or employees? If the business has multiple owners, you and your fellow owners should have a plan in place so the business can continue without interruption, or interference from undesired heirs owning part of the business. If you are the sole owner of your business, do you have a contingency plan in place so your custodians or heirs can sell the business in an orderly manner? Or, perhaps you can minimize the impact to your family upon your disability or death through insurance.
  • Do you want to keep the business in the family or sell to a third party? We help you weigh the advantages and disadvantages of each of these options.
  • Who's going to run the business when you're gone? Management and ownership are not one and the same. You may decide to transfer management of your business to just one of your children but transfer equal shares of business ownership to all your children, whether they're actively involved in the business or not.
  • Minimizing the tax bite. You should involve your tax advisor early in your negotiations. Taxes can significantly erode any profits when you sell your business. You need to know the alternatives that avoid taxes on the sale, especially if you have to pay some of the tax using ordinary rates. The tax impact can play a large part in negotiating the selling price with the purchaser of your business. Generally, what helps the seller with taxes, hurts the purchaser and vice versa -- although we know of ways in which that is not always the case.

  • Making it fair. If you opt for transferring ownership to family members, this can result in family feuds. We may be able to help by discussing the transfer of business and other assets with you and your family members to help them understand your wishes for them, and how they benefit from it. We may also be able to recommend ways in which family members who are not involved in the business can still receive cash flow from the business through means other than compensation.

What We Can Do For You

Once we understand how you feel about the key issues above, we begin constructing your succession plan focusing on these 5 issues.

  1. We can discuss the issues regarding ongoing business succession to minimize the impact of illness, disability or death.
  2. We can refer you to someone who can prepare a business valuation if you need it.
  3. If you are transferring the business to family members, we can advise you about properly restructuring ownership of the business to minimize income and gift taxes.
  4. We can discuss with you the tax cost from the sale or other disposition of your business.
  5. We can prepare tax projections showing the alternatives of the sale or other disposition of your business.
  6. We can prepare retirement projections if you are concerned about your income in your post-working years.


If one of your concerns is having a plan for business succession, please call Jim Blowers at (518) 344-6087 to discuss those concerns.