Posted on Jul 2, 2016

Scenic high way

You Can “Manufacture” a Succession Plan in Months,
Enjoy it for Years.

As a longtime CPA in the Dallas area, I have worked with a lot of family-owned and closely held small business owners, particularly in manufacturing and distribution companies. If you are among the small and medium-sized business owners who are age 50 or older, that gives most of you a window of 10 years or less to fully execute a business transition or succession plan. Fortunately, creating the actual succession plan can take less than one year. This whitepaper can be your accounting starter kit or template for a fruitful business transition. Use it to support a healthier business and a more secure retirement. Your future begins…now.

As a business owner, you have always forged your own path, but at the height of your leadership lies the big question: What’s next?

Succession planning is like a nagging incompletion in the back of your mind. You have plenty of reminders from your attorney, your CPA, your spouse and maybe even your children. You know you need to face it, but inertia sets in. It all feels so complex, so overwhelming, and so FINAL.

WP Download - Succession PlanningOne day, you overhear a conversation on the golf course (or at your favorite restaurant). “Poor Fred. After 40 years, the only thing he can do is liquidate when he finally decides to call it quits. It’s too bad…”

If you don’t have a plan, someone or something will create the plan for you. Due to the unfortunate lack of business succession planning, only about 30 percent of successful family businesses survive into the second generation, according to The Family Firm Institute. A survey of advisors through the Financial Planners Association also found that only 30 percent of their clients had a written succession plan — even though 78 percent of clients planned to fund their retirements through a business sale.

Really? A Succession Plan in Seven Months?

In our experience, about 80 percent of business succession planning can be developed in seven months. Some plans take more time, some less, but the average timetable is about 210 days.

Step one: declare your commitment to create a plan. Share this commitment with your three closest advisors. This team usually includes your attorney, your CPA and your investment advisor, but it could also include your banker, your CFO and/or members of your leadership team. This team will keep you accountable for the planning process by organizing meetings and asking important questions. Planning is divided into three phases:

PHASE I – 90 days of Assessment – facing the unknowns

  • What is your business really worth?
  • What do you really need in retirement?
  • How does ownership translate into retirement assets?
  • Who will step into the ownership role(s)?
  • What’s your Plan A and Plan B scenario?
  • What will you do next?
  • What is your timetable for fully transitioning out?

PHASE II – 90 days of Execution – sharing the plan and getting feedback

  • Who will help you execute and monitor the plan?
  • What are the gaps and issues?
  • How can you prioritize fixing the gaps and issues?
  • What if all doesn’t go as planned?

PHASE III – 30 days of Communication – establishing timing and deliverables

  • How will you communicate the plan to leaders, clients, employees, family?
  • What can reinforce buy-in and cooperation?
  • What contracts and documents must be in place?
  • What is the exact timetable and launch?

To dive deeper into each phase of planning a succession plan for your business, click on the links below to read more on each phase.

Phase I – Assessment: Facing the Unknowns of Succession Planning
Phase II – Execution: Sharing Your Succession Plan
Phase III – Communication: Establishing Timing and Deliverables for Your Succession Plan


For more information on guiding your small business through succession planning, talk to the tax team at Cornwell Jackson.

GJ HeadshotGary Jackson, CPA, is the lead tax partner in Cornwell Jackson’s business succession practice as has led or assisted in hundreds of succession and sales transactions. Gary has built businesses, managed them, developed leadership teams and sold divisions of his business, and he utilizes this real world practical experience in both managing Cornwell Jackson and in providing consulting services such as succession planning to management teams and business leaders across North Texas.