Demystifying Succession Planning

Succession Success Part 1: Myths and Traps

Are you prepared for the future of your business?

Are you prepared for the future of your business? Whether you're considering transitioning your business to a family member, key employee, or selling it altogether, having a solid succession plan in place is crucial. In our three-part series on succession planning, we delve into the myths and traps that many business owners encounter on their journey towards a successful transition.

Our first webinar, led by seasoned expert Tom Kuhn, offers invaluable insights gained from years of advising over 50 clients and conducting in-depth research on business succession. He debunks some common misconceptions:

9 Myths & Traps In Succession Planning:

Myth #1: "It Won't Be Emotional"

One of the most prevalent myths is that the process of selling or transitioning a business will be devoid of emotions. In reality, it can be an intensely emotional experience for owners, representing their life's work and legacy. Recognizing and honoring these emotions is essential as you embark on the journey of succession.

Myth #2: "You Have Time"

Many business owners underestimate the time required to prepare for a successful transition. Tom emphasizes the importance of starting early, citing an average readiness period of around three years. Procrastination can lead to missed opportunities and unnecessary stress down the line.

Myth #3: "You Need Only One Advisor"

Succession planning requires a multidisciplinary approach. While your CPA may be a trusted advisor, you'll likely need a team comprising legal counsel, wealth management experts, and possibly insurance advisors. Collaboration among diverse professionals ensures comprehensive guidance tailored to your unique needs.

Myth #4: "You're Dealing with Just the Buyer"

A successful transition involves navigating the interests of various stakeholders beyond the buyer, including their families and other influencers. Clear communication and transparency with all parties are essential to mitigate misunderstandings and ensure a smooth transition.

Myth #5: "You Should Provide All the Financing"

While some owner financing may be involved, Tom advises against shouldering the entire financial burden. Buyers' investment in the transition fosters commitment and accountability, enhancing the likelihood of long-term success.

Myth #6: "Communication Will Be Clear"

Expect communication challenges, inconsistencies, and delays throughout the succession process. Misunderstandings are common, given the technical nature of the transition and the involvement of multiple parties. Patience and proactive communication strategies are key to overcoming these obstacles.

Myth #7: "There Won't Be False Starts"

Be prepared for potential setbacks and false starts along the way. While frustrating, persistence and perseverance are essential qualities for navigating the complexities of succession planning.

Myth #8: "Rants Will Help"

Venting frustrations or dwelling on industry challenges won't contribute to a successful transition. Stay focused on your goals and maintain a constructive mindset to overcome obstacles effectively.

Myth #9: "Size Doesn't Matter"

The size of your business and the transaction significantly impact your succession options. From engaging business brokers to exploring employee stock ownership plans (ESOPs), understanding the implications of size is crucial in formulating a viable succession strategy.

As you reflect on these myths and traps, consider your own succession journey, what are your motivations, challenges, and aspirations for the future of your business?

We’d love to hear from you! Get in touch here. 

Ready to bust some myths and traps?

Join our Succession Masterclass

Thinking about selling, merging, bringing on a partner, or transitioning out of your business within the next 10 years? Join us for a masterclass on succession and exit planning. For owners looking to grow, go, and let go, this event is perfect for you.

  • Monday, October 7, 2024 | Minneapolis, MN

  • $1495

Book a free discovery call and find out how we can help transform your business.