Plan a smooth business succession that preserves the legacy you’ve worked hard to build.

Frequently Asked Questions

• What is succession planning?

  Simply put, succession planning is preparing a transition of leadership, whether it’s senior leadership or—as we most commonly handle—ownership at a company.

  A successful succession plan takes into account the business’s current strengths as well as the leader/owner’s personal financial picture, family dynamics and convictions. This helps position the business for ongoing success after the departure of the leader/owner and ensures the transition fits with that individual’s goals for their next phase in life.

• Who needs a succession plan?

  Any business in a growing phase should start the process of succession planning in order to have a strategy in place were key personnel to move on, either moving to different professional opportunities, retiring, reducing their responsibilities or passing away.

  Business owners who are nearing retirement in particular need to have an updated succession plan in place to ensure a smooth transition where they can enjoy the fruit of their hard work and know that their business is in good hands.

• When do I need to start succession planning?

  We often say that a succession plan is not an event: it’s a journey. There are often key phases in a succession plan as the business owner starts to step away from certain responsibilities and passes them on to their successor(s). Additional formal training may be required before certain phases can begin and there’s a whole communication strategy that needs to be executed in order to give clients, customers, prospects, employees and family members confidence that the business is prepared for the transition and will continue to thrive for years after.

  Therefore, a succession plan a lot like an estate plan, but for a business. Every business in the growing stages should implement a succession plan which gets updated whenever a significant event occurs.

  The earlier a plan is put in place, the better will protect the business from any change in leadership.

• What should my succession plan include?

  A successful succession plan includes the following:

  • Specific goals of the succession.
  • A detailed timeline of the succession, including milestones that need to be attained in order to move on to the next phase.
  • A successor (or list of successors) and any training or professional development required for them to succeed in their upcoming role.
  • An in-depth audit of the entire organization identifying key employees, current strengths, weaknesses, opportunities and threats as well as financial statements, including accurate projections.
  • A communication strategy to inform clients, customers, prospects, potential buyers, the management team as well as the business owner’s relatives of the transition plans in order to give imbue confidence that the business is well positioned to thrive after the change.
  • A description of roles and responsibilities before, during and after the transition. Not every business owner is looking to entirely step away from their business once they transfer ownership. Having their new role documented helps provide structure and support for the successor, the employees, the business owner and the family.
  • An implementation plan.

  We also believe that the final transition plan must be rooted in a deep understanding of the needs of the family and that our clients should see their values, convictions, hopes and dreams reflected into an actionable plan.

• What is the succession planning process?

  We use a proven and trusted five-step process when working with our clients on their succession plan.

  1. Prepare. This is an important stage. It allows to lay the groundwork with our clients, getting them on the same page about what the process will look like. Here, we discover their overall needs and objectives for their plan and learn about the various participants who will need to be involved.
  2. Discover. At this stage, we conduct an in-depth survey of the business, the business owner, as well as their current personal wealth system. A business succession doesn’t just affect the business owner and their business: it affects their family as well. At the end of this phase, we facilitate a meeting to present our findings, discuss behavioural insights and hold a family conference.
  3. Dream. The outcome of this stage is to help the client refine the details of their preferred future, while taking into consideration the available resources and the convictions of others. It is important at this stage of the process that we have a clear understanding of the client’s values and convictions, so that what matters most to them is clearly connected to their overall planning objectives. Then we refine the planning objectives and wealth system document using the input from the client and key participants.
  4. Design. Using the information gathered, we generate alternative plans and strategies that will allow the client to achieve their preferred future. We then help the client evaluate these so they can choose a preferred plan and develop with them a communication strategy. Keeping in mind that the final transition plan must be rooted in a deep understanding of the needs of the family, our goal is for the client to see their values, convictions, hopes and dreams integrated into an actionable plan.
  5. Deliver. Finally, we ensure that the chosen transition plan is effectively implemented, monitored and maintained. This stage requires a great deal of time, coaching, evaluation, technical work, accountability and prayer.

• Who should I transition or sell my business to?

  There are broadly two options insiders (family and/or employees) or outsiders (arms-length purchaser). The larger and more complex the business, the more likely it becomes that a sale will occur to a third party, often a competitor or a strategic buyer. There is normally less of a market for smaller businesses, and often being more of an alignment to a sale to a qualified insider. A sale to an insider typically allows the seller to maintain a role in the business for a longer time. Still, with the downside, this type of deal will often require a vendor financing element, so more risk for the seller. A sale to insiders might also be favoured by the seller so that there is a higher likelihood of preservation of culture and legacy.

• Should I bring key employees into share ownership in my company?

  Bringing a key employee into ownership unless part of an ultimate transition strategy of ownership should be carefully considered. Consideration whether another strategy such as a bonus plan or phantom share plan can achieve the same result of tying the employee’s remuneration to business success. Adding an additional shareholder creates complexity for the tax planning of the existing shareholder as well as additional reporting requirements.

Ready to preserve your legacy?

Book an appointment today and get started on your business succession plan.