ph: (312) 368-0100 | fx: (312) 368-0111
180 North LaSalle Street, Suite 3200 | Chicago, Illinois 60601

Will Your Business Succeed Without You?

Control Succession Planning So Your Business Can Prosper
With or Without You


This program is designed to motivate you (the business owners) to embark on the succession planning process while you can exercise control.

General Overview

A. What is business succession

  1. difference between ownership and management
  2. difference between ownership and employment
  3. difference between business succession and estate planning

B. What is estate planning

  1. asset management
  2. asset division and distribution to accomplish your personal desires
  3. estate and income tax minimization
  4. probate avoidance

Estate Planning Is Not Succession Planning

A. What assets are in the estate

  1. Real estate
  2. Investments
  3. Cash
  4. Business

B. What is the anticipated size of the estate

  1. Estate taxes
  2. Gift taxes
  3. GST taxes

C. Who are the intended beneficiaries and what are their needs

  1. Spouse
  2. Children
  3. Grandchildren
  4. Charities

D. How should the beneficiaries receive their inheritance

  1. Trust
  2. Outright

The Business Succession Planning Business Begins by Assessing Your Current Situation, Needs and Desires

A. Who are the current business owners

  1. their relationships
  2. their ages
  3. their business responsibilities
  4. are all owners active in the business
  5. are family members active in the business
  6. when does each owner desire to retire
  7. does each owner desire to transfer ownership; when
  8. is each owner willing to transfer control; when

B. Financial needs of each of the owners and the business

  1. current needs
  2. needs upon disability
  3. needs upon retirement
  4. needs upon owner’s death
  5. liability of owners for debts of business
  6. for most entrepreneurs their businesses constitute a substantial portion of their net worth

C. To whom should the ownership be transferred

  1. your partner or co-shareholder (does your business have a buy-sell agreement?)
  2. your surviving spouse
  3. family members (often have conflict in family business)
  4. key employees
  5. all employees
  6. ESOP
  7. the most financially attractive alternative may be to sell to third party, even a competitor

D. Build your business by maintaining a good management team

  1. protect your business with good policies and practices
    1. employment manual
    2. confidentiality, non-disclosure agreements
    3. non-competition agreements
    4. hiring and evaluation process
  2. offer attractive long-term benefits other than cash (e.g. “golden-handcuffs”), such as non-qualified deferred compensation plans, executive bonus plans, rabbi trusts and secular trusts, stock appreciation plans
  3. offer incentives
    1. periodic stock sale to key management
    2. restricted stock options
    3. stock bonus plans
    4. ESOP
    5. phantom stock plans
  4. To whom should management be transferred?

V. Why Plan for Business Succession

  1. Obstacles to business succession planning
    1. unwillingness to plan
    2. unable to plan
    3. mistaken belief that good will or trust is enough
    4. unrealistic expectations of the future
    5. conflict between business succession and financial security
    6. fear of making the wrong choice
  2. If you do not properly plan then
    1. business relationships and the business are at risk
    2. family and employee relationships lack trust

When Will Ownership Be Transferred

  1. During the time that the owner is still able to manage his affairs
  2. Upon the retirement of the owner
  3. Upon the death or disability of the owner, when he or she can no longer influence the process

How Will Owership Be Tranferred

  1. buy-sell agreement
  2. sale
  3. lifetime gifts
  4. gifts upon death
  5. joint tenancy
  6. stock bonus or incentive plan for employees
  7. is the business divisible into two or more businesses; is the whole worth more than the parts
  8. tax considerations

What is the Business Worth and What are the Payment Terms

A. Methods to determine value

  1. valuation methods
  2. agreed upon price
  3. financial needs to the owner
  4. what is really “fair”

B. How will you be paid/security

  1. unless you get paid in full upon sale, is there a risk of non-payment
  2. installment sale with collateral
    1. third party guarantees
    2. lien on stock or assets of the business
    3. lien on other property of purchaser
    4. letter of credit


Business succession planning gives entrepreneurs the opportunity to influence what will happen to the business beyond their involvement and to protect their families. Without succession planning there is no control. Survival of the business and/or the family is cast to fate and chance.