What Tips Do You Have for Business Owners Related to Succession Planning?

Video Transcript

Succession planning should start at the very beginning. I always ask business owners, “Okay, how are you going to get out of this? What’s your plan to exit?” And they always say, “Well, wait a minute. I’m just starting. Why are you talking about exit?” Because if you’re a business owner, if you’re an owner of a business, either you’re investing your capital or you work in that business, you eventually are going to retire or your siblings, or what have you. You’re going to retire and you need to think about what’s the next step for my business. Is it going to be my children? Am I going to sell it to someone else? Am I going to bring in employees that are going to take over for me and that’s my retirement?

And so I always tell business owners, it’s never too early to think about it. Because you might be building a business that you can’t pass on to somebody. No one will buy it. And so you have to start thinking like what’s my exit. And I think it’s usually in the 50s. I start to tell people, “Yeah. You should be thinking about what’s going to happen. Are you going to work till you die? Or are you going to at 65?” And I work with a lot of professional service businesses, closely held businesses, financial advisors, licensed, all sorts of doctors. And they always think, “How do I move this on? How do I do this?” And I always say, “It’s either bring on the next generation or look at your children or look at someone else to buy it.” But it’s never too early to think about that.