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What does my family need to know to ensure a winning business succession?

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There are important steps that need to be taken to obtain a winning succession for a family business. From the initial planning stages to the final transaction, careful thought and proper guidance will produce a successful result for all parties involved.

That’s why it’s crucial for everyone touched by a family business—both the owners and their family members—to become fully informed and understand all of their value-enhancement and monetization and transfer options.

The following five steps delineate the suggestions we make to help clients produce a viable succession plan for their family business.


There is an oft-mentioned statistic in our industry whereby 75 percent of business owners who have transferred their companies report having had post-exit remorse. Why so high? A PricewaterhouseCoopers study cited the finding that all too often, the transfer didn’t accomplish the business owner’s financial and/or personal goals.

When these same owners were asked what they would do differently if they could do it all over again, their response was they would have been better informed and more prepared.


We can add value any time a client comes to us for advice, even at the end—the transaction stage. We can add the greatest value if we can get involved three to five years in advance of a business transition.

In order to develop and then implement the business owner’s goals in a viable plan, early professional advice can provide:

  • strategic planning and value-enhancement opportunities
  • advanced tax-savings options
  • pre-sale/transfer preparedness
  • personal wealth-planning strategies

    The alignment of family interests is a key component. Balancing the interests of the current owners with those of new family members or other potential owners requires special consideration. Within a family, there could be inter-family disputes. Estate taxation could be another primary concern for the succession of a business within the family context, as could a sale to an outside concern.

    The holistic nature of the advisory role in these situations requires various disciplines and expertise. Our firm’s specific subject matter expertise is in strategic planning and value enhancement. Collaborating with owners, their families and their advisors is central to our role in our client’s success. So is working with their various family advisors to develop, vet and implement the client’s strategic plan.


    We focus on transferable value, which is value from a buyer’s perspective, no matter whether the buyer is an external party or the next generation. The common objective of any buyer is for the business to produce a sustainable and growing cash flow with the least amount of risk for disruption. The two levers to transferable value include:

  • the buyer’s expected cash-flow stream
  • the risk to achieve that stream
  • We make sure to address both in our value-enhancement process. It is the process of strengthening the business from the inside out that in turn increases its value, and as a result, increases sales and margins.


    Owners should be assisted to make this wealth conversion on their own terms. That’s why the following considerations must factor into the equation of succession planning:

  • personal taxation
  • business taxation
  • wealth planning
  • Important here is a robust discovery process that deals with personal areas, family and wealth. This information in turn creates an assessment report from which experts can be pulled in to create a very detailed plan.

    At Smolin, we create an action report, go through an income and estate-tax planning process and ultimately prepare for the monetization event. It is our responsibility through this complex process to advocate for our clients with the right attorneys and banks and help them negotiate the right deal.

    In the end, the point is to align the stars for clients. With this level of planning, they will be financially and emotionally prepared; their company’s value will have been maximized; and the strategic tax planning will be complete.

    Then, when the timing is right, the business owner can transition on his or her own terms, and achieve the desired business goals in the best possible manner.

    Business Ownership

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