Two-thirds of businesses in the United States are owned by entrepreneurs over the age of 50. It is estimated that 10 million of those business owners will retire in the next 10 years. It is also estimated that 35% of those businesses will not sell due to poor succession planning. Only 1 in 4 closely held businesses have a formal succession plan in place.
Recently, Corrigan Krause and Weston Hurd LLP teamed up for the “Bright Idea Series” and presented to a group of closely-held business owners the importance of proper succession planning. The presentation included case studies and common issues faced by business owners when it comes time to transition out of their closely held business. The most important themes of the presentation were to start succession planning early and to update the plan regularly.
We encourage our clients to begin the process with a business valuation and then partner with an attorney to draft succession planning documents. The valuation process not only sets an initial value from which to begin planning, but it also uncovers risks and opportunities that can help the business owner prepare the company for transition. Our management interview process helps business owners prepare for sale by addressing risks such as lack of management depth, customer concentration and access to capital among others. If you are a small business owner age 50 or older, contact Corrigan Krause to begin your succession planning today.