C. P. Schumann, P.C.
Business Valuation, Accounting, and Litigation Support

The Process

Business Succession

Succession planning follows a process that is customized for each client. However, the following areas are covered in every succession plan:

  • Contingencies for an untimely death or incapacitation of key family managers
  • Subordinate roles, responsibilities, and career paths
  • Ownership percentages
  • The emotional issues involved in family succession
  • Strategies to keep the business interest ahead of the family interest

Planning Process

Planning for business succession usually begins with a preliminary evaluation. To gain an understanding of your business and to determine whether the succession plan will meet the objectives of your business and its owners, we will research the history and operations of your business. The engagement will consist of many activities, including client interviews, reviews of financial statements, tax returns and other relevant documents. These documents may include trust agreements, wills, shareholder, buy-sell and partnership agreements.

Our role is to help you, the business owner, select a solution that satisfies your objectives and provides for a means to continue the enterprise.

In addition to your own goals, we address these key issues:

  • Minimizing taxes – the tax bite in transitioning a family business can be significant. Actually, the problem is both the amount of the tax and the way it is paid. Although a family business is not generally a liquid investment, taxes are normally due when ownership is transferred.
  • Company leadership –unless it addresses questions of executive, financial and operational leadership, the best plan will not help the business thrive as ownership passes. Our succession planners work with you and other parties to ensure that this issue is addressed and settled in advance.
  • Equality and fairness – we confer with individual family members to ensure that the issues of equality and fairness are upheld within the family’s core values.
  • Family control – our transition plan may recommend the option of selling the business to a third party. We will help you weigh the advantages and disadvantages of continuing family control versus other alternatives.

Four Stages

There are four basic stages involved in developing a business succession plan. When our professionals create a plan, they utilize their business and financial acumen to create a plan that is both workable and economically feasible. The four steps include:

  • Fact finding
  • Developing alternatives for succession
  • Communicating findings and recommendations
  • Implementing the succession plan

Request a consultation or submit a question.