Succession Planning in Family Enterprises and Independently Held Businesses

Posted by Maria Milanetti & filed under Family and Independent Business.

This blog is meant for Family Enterprises, Independently Held Businesses and their Advisors. We are writing this series of blogs for our close connections and those that they network with on a regular basis. Please let us know if you have any feedback for us on this series which will include different topics of interest for Family Enterprises and Independently Held Business and its advisors.

Succession Planning in Family Enterprises and Independently Held Businesses

Only 10% of business owners have a formal plan to transition or sell. When we ask about an informal or unwritten plan to sell that number still climbs to only 38% according to our research sources and our experience speaking to business owners.

As a result, what we do know is that many Family Enterprises and Independently Held Businesses do not have a Transition or Succession Plan. And neither are they thinking about where their business(es) might be in the next 2 to 5 years.

Family Enterprises and Independently Held Business owners often cannot get around to planning for the future of their business. And why you might ask? The usual answer: They are too busy running a successful business!

They often speak to their accountant or lawyer regularly about the future, but often these talks do not lead naturally to a planning cycle where they sort out what is next for the business. Many business owners find it hard to find the time and the peace of mind to forward-plan for their businesses in an organized and structured way.

Ways in which advisors can help them through this process include the following:

  1.  Help them to make a Plan to Plan
  2. Lead them through a look at their Business Plans, Client Needs and the External Environment
  3. Assist them in looking at their Current Processes, and Name and Review how those Processes might fit, going forward, with their future plans for the Business
  4. Enable them, over a period of time, to Plan for the Future Processes, Management and Support for their Organization

The Succession Planning Process as We See It

The Process of Succession Planning and Transition to the next chapter of management and leadership in your company is a tough subject to nail down.  Business owners who we speak to and work with on a daily basis are all different. They have different needs and wants, they are configured differently, and the way that they would like to see transition and succession planning evolve varies. As a result, every outcome is customized and unique for the client.

Key “Big Picture” Things to Consider for Your Business During Succession Planning

 Timing – What is the timing of change for the owner(s) and for the business?

  • What will the transition process for the owner(s) be?
  • What is the best timing for the business and its continued success?
 Possibilities – What are the possible scenarios?

  • What is the timing and logic of those possible scenarios and what resources (human, financial, physical) will be associated with each scenario?
 Successor(s) – Do you have a family member, business partner or is there a need for a more formal, professional  management team that will be hired to manage the company immediately or over time?

  • Is/are the successor(s) and/or professional managers you are considering well suited for and ready to assume these positions?
  • Management/Owner consideration and assessment of candidates are involved in answering these questions

Final Results

Final results of the Transition or Succession Planning process include:

  • A final set of processes that the business needs to deliver
  • A set of scenarios for the business that allow the owner(s) to make their next decisions on which direction they want to take the business in its next chapter
  • A final scenario that is the favoured scenario for the business, with associated plans for implementation
  • A transition or succession plan for leadership that can be enacted


Transition and Succession Planning are not simple processes, but with planning and thought they can go much more smoothly. Business owners are busy and focussed people with a lot on their plate. Getting to the planning process for their business is not an easy thing, despite their best intentions.  The outcomes you should expect from engaging in a Succession Planning Process are answers to the following questions:

  • If you were to predict it, what will the future direction of the business be?
  • How will you choose and train a successor?
  • What will your role as owner be if you were to move away from the business either quickly or more slowly?
  • What Communication Plan will you have to put in place to deal with:
    • Prospective successors?
    • Employees and clients?
    • Possible prospective buyers?

And finally, how will a transition or succession plan help you to sleep better at night while moving your business forward into its next iteration?

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