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Business Succession and Exit Planning


What is Business Succession Planning?

Succession planning is the process of preparing your business for a leadership transition when you are ready to leave the company. It refers to the approach and preparation of identifying successors within the business and helping them with the process of developing their skills and experience so they can replace the existing leaders at a future date.

If you are not transferring the business to family or key management staff, you may be looking at a third-party sale. No matter which option you use to secede your business, you will need a plan. The process (often called exit planning) includes a comprehensive approach that factors in the impact to the business owner, their family, employees, and the community.



What is the Significance of a Business Succession Plan?

A business succession plan should consider the exit strategy for the owner along with their personal objectives and financial goals. Your objectives will help you decide which of the ways you want to exit your business:


By transferring to family


By transferring to key management


By selling to a third party

The option you choose will guide the plan you develop. The biggest part of the process is planning ahead to ensure there is time for you to understand the value of your business and take steps to increase the value, if needed, before your exit. 

This plan is your roadmap and should be started at least five years before your projected exit date. Getting a written plan in place, even if you adjust along the way, will give you the best possible outcome.

Below is a sample 7-year timeline showing the steps in the exit process. This timeline can be adjusted based on your schedule. The earlier you start, the more successful your transition will be.


Why You Should NOT Write Your Own Business Succession Plan?

The most effective way to create a plan is to gather a team of advisors who understand your business.

The plan needs to include a financial analysis, company valuation, due diligence review, tax planning strategies, and your estate plan development. This is not the time to go it alone. You will benefit from working with a team that has specialized training and experience in the process.

Start Your Roadmap Using This 7-Step Process

The BEI Seven Step Exit Planning Process™ is a customized comprehensive approach to designing and implementing a business owner’s successful exit from their company. The Exit Planning Process helps maximize the financial return, minimize tax liability, plan for contingencies, and increase the likelihood of a successful transfer out of the business.


Services Offered: How SVA Can Help

Business professionals need easy access to information to make timely decisions. SVA has what you need, when you need it. Choose a topic below or just contact us directly. Our expertise is ready anytime you need it.

One of the first steps in a successful business succession plan is creating as much value as possible in your business. This is the time to step back and rely on an advisor to help you look at the aspects of your business and determine where you can improve your value. Learn about the benefits of the Value Builder System™.

If you are looking to sell to a third party, you will need to follow the four phases of a successful merger. These include Pre-Acquisition Planning, Due Diligence, Deal Negotiation, and Post-Acquisition Strategy. SVA has experience in all phases of the merger and acquisition process and our certified valuation experts can help make the transaction financially feasible.

There are a number of valuation methodologies that can be used to determine business value. The valuation is a critical component of the process as it is the primary driver for determining how much you will receive for your business. According to BEI’s Business Owner Survey Report, “60% of owners say they used informal valuation methods to determine the value of their business. This indicates that most business owners are still basing their projections on unsteady grounds.” Our Certified Valuation Analysts have extensive experience to help you with an offer that aligns with the value of your business.

The fact is that every business owner will leave his or her business at some point. But most business owners are so busy doing the things necessary to be successful that they have not taken the time to consider planning ahead for their eventual exit from their business. Using The BEI (Business Enterprise Institute) Seven Step Exit Planning Process™, we will help you look into the future and prepare for the transition out of your business.



Exit Paths for Business Owners

As business owners start to think about exiting their companies, a decision on what exit path is the best option needs to be made. This eGuide will equip you with the knowledge you need to get started.


Successful Transfer of Family Business

There are a number of factors that go into how to execute on a successful business transfer. This eGuide will provide the insights to assist you in making a successful transfer.


Transferring Your Company to Key Employees

Download this eGuide to educate yourself on how to navigate the risks surrounding the transfer of your company to key employees.


Advantages and Challenges of a Third-Party Sale

Do you know the pros and cons of selling to a third party? This eGuide will ensure you are informed about the variables to consider.


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