Situation and Objectives:

  • John is 61 years old, the President and majority shareholder of regional plumbing and heating company with $55 million in sales.
  • He receives weekly unsolicited calls from business brokers and investment bankers with offers to buy or sell the company.
  • He knows that he needs to plan for his eventual exit from the business and the calls are a constant reminder that he hasn't done anything yet.
  • John is concerned that the callers' best interests may not be his.


  • Company owners, directors and key employees now think like a buyer...
  • With a clear understanding of the company's value and the key drivers of the valuation, John and the other shareholders and Board of Directors concluded that although today was not the right time to take the company to market, it would be ready to go to market in the next 12-24 months.
  • Restructuring the company saved significant taxes upon sale and facilitated a less complicated sale transaction.
  • A "Stay Bonus Plan" was implemented to entice the company's key employees to stay through closing and add employment restrictions to prevent value dilution from a buyer's perspective.
  • John was now armed with the tools to choose the right investment banker to sell the company on his schedule and on his terms.

Why Succession Planning Matters

  • The family business is a valuable asset that can change the lives of your family members for generations.
  • Half of all companies have no succession plan, and the percentage is even higher in small firms or those that have been in business for fewer than twenty years.
  • 72 millions baby boomers are now in the workforce and preparing to retire in the next ten years or less—probably some of your best employees.
  • 84% of owners want to pass on the business to their children, but less than half actually do so.
  • Nearly 12 million family businesses will change hands over the next 10 years and they employ over 60% of working Americans.
  • Only 3 out of 10 family businesses survive the second generation and only 1 in 10 survive the third.
  • Over one-third of family businesses have no procedures for dealing with disputes between family members.
  • Accountants tell you what has happened and what you owe, lawyers protect you from the worst case, but who helps you actually build and protect the value in your business?

The statistics provided above have been derived from a variety of surveys of closely held business owners including: the PricewaterhouseCoopers 2007-2008 survey of nearly 1,500 closely held companies; the 2007 survey of 800 closely held businesses by the University of Connecticut School of Business Administration Survey; and the 2003 Arthur Andersen/Mass Mutual American Family Business Survey.

Strategic Planning 3.0 Whitepaper

Every leader has a sense of purpose — an inner drive to support the success of the mission — whether it is a non-profit, community collaboration, or private firm. A good leader also has a sense of adventure, balanced by sound judgment. To be successful, a leader needs a good “map.” A map is a critical tool to help a business leader find out:

  • Where she is (the business environment)
  • Where she is trying to go (goals and objectives)
  • How best to get there (what action is required)
  • How to avoid dangerous terrain (what market activities might be predicted) 

Without a good map, the firm may be led into a quagmire — or worse...  

Download the full paper