At Swanson Midgley, our attorneys have observed many business succession plans that worked, while also witnessing many plans that have failed. In most cases, the parties believed that they had adequately documented their succession plan, often in the form of what is commonly referred to as a “buy-sell agreement.” So why the difference in outcomes.
It is not because there are too few seminars addressing the topic of how to leave your business to your children, to your key employees, or how to structure a sale to a third party. There are also many books written on the topic of succession planning, however, there is a missing element – You, the business owner, your Business, your Partner(s), and your Family, are unique. At Swanson, we believe by focusing on these key words when designing a succession plan for a business, there is a much better chance that the right plan will be discovered.
We believe that business succession planning is extremely important. It is often the most significant asset that an individual owns. Moreover, if a person wants to preserve family harmony, addressing the impact that selling one’s business to a third-party can have on the extended family must be recognized.
We have a rule of thumb for a well-designed succession plan. If three-fourths of our time is spent asking questions and then listening to the client and other interested parties while designing the succession plan, and one-fourth on drafting, editing and finalizing documents, there is a good chance our client will be well served.