Succession Planning

Ownership succession planning is a vital and important step for a privately held company. Failing to plan for the orderly transition may result in the demise of the business and loss of personal wealth.  According to statistics, only 20 to 30 percent of American family businesses make it to the third generation. What is the reason? Lack of succession planning and the owner's resistance to relinquish control.

Succession planning is not as simple as one may think. Depending on the company and the owner's situation, it can be a very complex process that requires detailed structuring. Just a few of the considerations include: Who will be the successor and if he or she is qualified, what training is necessary for the successor, control issues, timing, financing, tax issues, removing personal guarantees of the owners, estate planning, transition period, valuing the business, pricing, funding and future strategies of the company.

Succession planning is essential and critically important to you, your family and your business. There are no easy answers to tough succession questions but sooner or later, these questions must be answered.

Amvest will work with you to sort through these questions and develop a succession plan that works for you.

According to a study released by Massachusetts Mutual Life Insurance Co., only 21 percent of the 614 family business owners interviewed had a written succession plan.  Forty-three percent said they had an unwritten plan, forty-four percent of the business owners said they had someone lined up to take over and 30 percent had no one in mind for the job. Two-thirds of the owners participating in the survey said they intended to pass ownership to a relative, twenty-four percent said they'd rather seek an outsider and 11 percent hadn't decided.