Business Succession Planning

Succession Planning is Key to Protecting Your Business and Your Family's Future

Your business is your livelihood, your greatest financial asset, and the embodiment of your expertise. Soon, you'll be ready to transform your business into the nest egg that funds your family's next chapter. A basic financial plan simply isn't enough when your business is your largest asset.

Business owners need different tax, retirement, and investment strategies to protect and grow their overall wealth.

As a business owner, you have access to unique retirement account options to bolster your savings in a tax-efficient way. You likely have more complex tax considerations because your business is your largest asset. And you almost certainly can benefit from a custom investment portfolio that helps you minimize the tax burden that eventually comes with selling your business.

At Heritage Financial, our business succession planning facilitates conversations with valuation experts, legal, accounting and other professionals who all work together on your behalf to help increase the value of your business and prepare it for sale. Our team then creates a financial plan that can model various business succession scenarios and implements a personalized investment strategy that seeks to achieve your goals while maximizing your after-tax wealth.

A business owner came to us after receiving an offer to purchase their business. Here’s how we helped with their business succession planning.

As a business owner, we know your top priority is your business.

You’re so busy running your business you likely haven’t stopped to think about the impact you want your business to have on your retirement, family, and legacy.

In fact, we often find that many business owners don’t know what questions to ask in the first place. That’s where we come in.

Our financial planning process starts with a thorough evaluation of your current financial situation. Then our experienced team will assess your risks, goals and objectives. We will use this information to create a customized financial plan that combines your business and personal goals. Here is what our process looks like:

1
Discovery
You talk. We listen. We learn all about your goals, objectives, financial situation, and what keeps you up at night.
2
State of The Union
We provide an analysis of your current financial position and compare that to your goals and objectives.
3
Recommendations
We present a detailed financial plan with custom recommendations and investment strategies.

Learn More About Our Process

The success of your business and personal goals are closely related. At Heritage Financial our experienced team provides personalized wealth management advice and business strategies tailored to your needs.

Financial Planning
Wealth Management
Cash Flow Planning
Retirement Savings

Tax Strategies
Risk Management
Succession Planning
Investments

Legacy and Estate Planning
Business Valuation
Transition Planning
Exit Strategy

Resources for Business Owners

Ready to preserve the wealth you’ve worked so hard to build?

Let's Talk

Business Succession Planning FAQS

What is business succession planning?

Business succession planning is important for business owners who want to maximize the value of their exit and ensure their company continues to thrive after they are no longer leading it. The goal of business succession planning is to minimize disruption, preserve the value of the business, and ensure its long-term success when the current leaders or owners leave, retire, or are otherwise unable to continue in their roles.

The process typically involves:

Identifying key positions and roles within the business that are critical to its success.
Assessing potential internal and external candidates who can fill those roles.
Providing training and development to prepare those candidates for future leadership positions.
Establishing a timeline for the transition of leadership.
Creating legal and financial arrangements to ensure the transfer of ownership or control, which may include wills, trusts, buy-sell agreements, or other financial instruments.

When should I start planning to sell my business?

Every business owner will leave their business someday. If you want to exit your business on your own terms, it’s never too early to start planning for transition and positioning your business for sale. Organize your financials, find ways to create greater value, and use internal and external advisors to help execute your personal and business goals.

Read about how we helped a recent business owner prepare for and execute the sale of his business and transition to retirement here.

What is my business worth?

There is no single formula for valuing a business. There are several variables that can impact what your business is worth at any given point in time.

What is the state of the economy? What is the state of your industry and its outlook? What multiple has historically been used to value a business like yours? Who are the interested buyers? What makes your business successful?

A credentialed and experienced business appraiser can help you identify a price range that is reasonable depending on the variables at play when you decide to sell.

At Heritage Financial, many of our clients are business owners. And we’ve helped many owners better understand the value of their business so they can prepare for an eventual retirement, whether it’s 5 years or 20 years into the future. Over the years, we’ve built a network of professional advisors, including business appraisers, that are instrumental to wealth management and financial planning strategies for business owners.

How can I maximize the value of my business?

To achieve the best possible price, terms, and outcome when it comes time to sell, we recommend having strong financial controls, budgeting, and reporting, a multi-year growth plan, and an internal and external advisory team. Having a good handle on all aspects of your business gives potential buyers greater confidence in knowing exactly what they are buying. An informed buyer may lead to a higher offer and better terms.

Who is going to buy my business?

There are many types of people and companies that may buy your business – family members, other company partners, a private equity firm, or a competitor.

Besides considering the type of buyer, you should also consider their location. Are they local in your community, based in the U.S., or a global buyer? If the potential buyer can realize synergies from acquiring your business, it’s going to be worth more.

If there isn’t a natural fit or known short-list of likely acquirers, Heritage Financial can introduce you to a business broker that can help with a targeted search in a similar way as an executive search agency helps identify talent.

What is a buy-sell agreement and do I need one?

A buy-sell agreement is a legally binding contract that outlines how a partner's share of a business may be reassigned if that partner dies or otherwise leaves the business. It is often used by businesses with multiple owners, such as partnerships or closely held corporations, to ensure a smooth transition of ownership and to protect the interests of all parties involved. There are different types of agreements with many components. If you're considering a buy-sell agreement or not sure if you need one, we recommend consulting with tax, legal and financial professionals who can all collaborate to help ensure that the agreement is comprehensive and well-structured.

Can I keep the business in my family?

For many business owners, the idea of passing the company down to the next generation is appealing, but it requires careful consideration involving more than just finances. Start by assessing whether family members are genuinely interested and capable of running the business. Open communication is crucial to ensure everyone’s expectations align.

Next, consider creating a succession plan that outlines how and when the transfer will happen. This plan should include training for the next generation, legal and tax implications, and how to handle potential conflicts. You may also want to explore options like establishing a family council to maintain a cohesive vision for the business. Keeping a business in the family can be rewarding, but it requires thoughtful preparation to ensure the transition is smooth and the company continues to thrive under new leadership.

What steps can I take to manage estate taxes?

An effective strategy to preserve wealth should take a comprehensive approach to include total household assets, not just the business itself. Transfers to the next generation during your lifetime can remove future appreciation from your taxable estate but likely need experienced estate and financial advisors to avoid unintended consequences. Decisions often need to strike a balance across income tax, estate tax, liquidity, and control. A detailed financial plan can be a roadmap to understand how gift and estate exemptions are likely to apply to your specific situation now and in the future.

What Our Clients Say

Mary and I have long thought that one of the best things we have done is to use Heritage Financial to take care of our financial affairs. In that regard, we feel Heritage Financial is doing an excellent job and quite frankly, we sleep well at night without any money worries. But more than that, we have met very nice, friendly, professional people at Heritage. Mary and I value these relationships very highly. The service that you both provided me today is deeply appreciated and more “frosting on the cake”.

Heritage Clients , Massachusetts

As a long-time client, I have nothing but positive things to say about Heritage Financial. They have strong principles, solid investment strategies, great communication and look at the financial picture holistically – investments, savings, property, insurance, estate, education, etc. everything to help you reach your goals.

Heritage has gained my trust, they invest as if it were their own money.

In a few words – Personalized. Strategic. Detail oriented. Responsive.

Joe & Patti , Massachusetts

I am a long-time client of Heritage. I highly recommend them. They are a highly coordinated team who have responded to all of our financial needs, update us regularly and always respond promptly to and questions we ask. They are very professional, friendly and easy to work with.

Peter , Massachusetts

Our experience with Heritage Financial services, has been nothing short of admirable. We have been with Heritage Financial for a long period of time, in which we’ve developed a strong and lasting relationship and friendship with many of the wealth advisors there. The advisors have been kind, honest, trusting and compassionate. Their advice has helped us make important financial decisions. We have recommended Heritage Financial to many of our friends, and family, and we will continue to recommend them.

Heritage Clients , Massachusetts

The team at Heritage Financial Services helped us reach our goal of retiring without worry. We have placed our financial health and trust in their professional hands for the last 20 plus years. We can’t say enough about their attention to detail and assistance in helping us to understand market drivers and trends. They also helped us to understand how to eventually retire and spend the portfolio that we worked so hard to create over the years. I would highly recommend Heritage to anyone that wants to feel a sense of great trust in their financial advisor…and I have!!