Business owners should consider succession planning as early as possible, especially when they are considering transferring their business to their children or other family members. Succession planning can also be part of a bigger picture that includes life plans, career plans, and what to do after you pass your business on to others. Deciding to create a family succession plan for your business involves more than simply transferring your business to your family members.
There are many issues to consider before, during, and after you decide to transfer or sell your business to your family members, including the following:
- Where can I get advice to make the best decisions?
- What are my options?
- Who can help me understand the family succession issues?
- What kind of planning do I need to do?
- Do I need a Letter of Intent ("LOI")?
- How do I negotiate an agreement with my family?
- What due diligence can I expect?
- How do I manage the transition effectively?
- What are my risks and how can I mitigate them?
Get Important Advice
- Help You Analyze Your Other Exit Options
- Help You Understand How Businesses are Valued
- Help You Develop the Best Plan for You
- Help You Develop a Plan for Succession Sustainability
- Help You Analyze Business and Family Politics
- Help You Analyze Inter-Personal Challenges of Succession
- Help You Analyze the Legal issues of Succession
- Help You Manage the Succession Process
- Help You Manage the Post Succession Process
- Help You Trouble Shoot Issues as they Arise
Analyze Options
- Identify your aspirations, dreams, and goals
- Identify your family members’ aspirations, dreams, & goals
- Identify your business stakeholders’ aspirations, dreams, & goals
- Analyze how family succession will affect your family
- Analyze how family succession will affect the business
- Analyze how family succession will affect you
- Compare family succession to selling to your workers
- Compare family succession to selling in the open market
- Analyze the financial issues for each option
Strategic Partners
- Family Counselor or Coach
- Industry Expert
- Valuation Expert
- Accountant and Tax Professionals
- Special Legal Support
- Consultants
Create A Plan
- Identify your personal vision and life cycle stage
- Identify how succession will help you realize your vision
- Identify your business vision and business life cycle stage
- Identify who will be in your succession planning team
- Identify the impact of succession on your family
- Identify the impact of succession of your workers
- Identify the impact of succession on your customers
- Identify critical dates
- Identify the successor candidates and their competencies
- Identify necessary leadership and operations competencies
- Identify the training needed for successors to succeed
- Identify how the training will be conducted and by whom
- Identify how and when workers will be informed
- Develop a timeframe from start to final exit
- Develop a transition management plan
- Develop a post exit plan to bolster institutional brain
Negotiate LOI
- Identify the Price Terms
- Identify the Assets of the Entity to be Sold
- Identify the Key Dates for Disclosure
- Identify the Key Timeline for Due Diligence
- Negotiate the Scope of NDA and Confidentiality Agreements
- Negotiate the Contingencies of the LOI
- Negotiate the date to Move from LOI to Contract
- Complete the vetting of the Buyer
Negotiate Purchase Agreement
- Negotiate the Price and any Contingencies
- Negotiate and Identify the Physical Assets Being Sold
- Negotiate and Identify the Intangible Assets Being Sold
- Negotiate and Identify the IP Assets Being Sold
- Negotiate the Assignment of Key Contracts and Releases
- Negotiate and Identify the Company’s Liabilities to be Assumed
- Identify the Key Timeline for Additional Due Diligence
- Negotiate Worker Benefits
- Negotiate Remedies for Breach
- Negotiate the Deposit, if Any
- Negotiate Seller Financing, if Beneficial to Seller
- Negotiate Transition Management Terms
- Negotiate Other Key Terms of Agreement
- Draft the Sales Agreement
- Draft Collateral Agreements
Due Diligence
- Organize, Review, and Explain Financial Statements
- Organize, Review, and Explain Real Estate Records
- Organize, Review, and Explain List of Tangible Assets
- Organize, Review, and Explain List of Intangible Assets
- Organize, Review, and Explain Employee Files
- Organize, Review, and Explain Non-Employee Worker Files
- Organize, Review, and Explain Vendor Files
- Organize, Review, and Explain Supplier Files
- Organize, Review, and Explain Bank Statements
- Organize, Review, and Explain Business Tax Returns
- Organize, Review, and Explain Litigation History and Cases
- Organize, Review, and Explain Organization Records
- Organize, Review, and Explain Proof of Good Standing
- Organize, Review, and Explain Auditor’s Letters
- Organize, Review, and Explain Company’s Budgets and Plans
- Organize, Review, and Explain Internal Control Procedures
- Organize, Review, and Explain other relevant records
- Help Execute Strategic Plan
- Address Issues as they Arise
- Help to Educate and Coach Successors
Manage Transition
- Prepare for Closing
- Closing Checklist
- Escrow Services
- Review, Analyze, and Advice on Closing Documents
- Ensure Assignments of Key Contracts
- Ensure Releases of Liability on Key Contracts
- If Seller’s Financing, Ensure Adequate Collateral
- If Seller’s Financing, Ensure Security Agreements Signed
- If Seller’s Financing, Ensure Correct Documents Recorded
- Ensure IRS Compliance
- Confirm Transition Management Issues Addressed
Reduce Risks
- Asset Protection Planning
- New Venture Planning
- Estate Planning
- Segmentation of Risky Assets
- Key Contracts to Limit Risks
- Ready Access to Private Corporate Counsel to be Proactive
Entrepreneurs sell their business for many reasons, some business related, some personal related. They continually seek to achieve prime in their personal life cycle, relationship life cycle, family life cycle, professional life cycle, work/job life cycle, and their financial life cycle. The sale of their business can allow them to spend time on all of their life cycles and afford the things that will help them be the best version of themselves, and give them the opportunity to help others. The Private Corporate Counsel’s membership program provides unlimited access to former business professionals to help them through each step of the journey and monthly coaching to address difficult issues as well as learn new ideas to ensure that they keep improving.
If you are thinking of transferring your business to your children, before making any decisions contact us
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