The process of transitioning a private company is likely the most complex issue facing owners. For many, it is the largest and most important transaction in their lifetime. Perhaps you are not looking to transition your business quite yet, but need advice in the area of strategy, employee compensation, or business finance.

At Workman White, we have significant experience helping business owners achieve their transition or financial goals by walking through our 5 Step process:

Workman White’s Five Steps of Succession Planning

1. Discover the Starting Point

When we get started with any engagement, we first assess the needs and objectives of the business and the business owner. Before we can figure out where we are going, we must know where we are. We review and analyze your personal and business financial plan to adequately establish all of the options available. We perform assessments, interviews, and review documents like financial statements, corporate documents, and key metrics. It is extremely important to us that we evaluate both the readiness of the business and business owner because both need to be ready for a successful transition or financial objective. Finally, we assess the current and emerging leadership as to understand all of the players and personalities. Research proves that the more stakeholders are involved in the process throughout, the higher the likelihood of success of the project.

2. Determine the Goals

One of the most important parts of our process is helping the exiting owner identify their goals for the transition, which will dictate which transfer solution is the best fit for the company. Do we need to pay down debt, invest in growth, create a leadership development program, etc.? At this stage, we must identify risks and pitfalls, strengths and weaknesses of any and all of the paths ahead.
We determine who is the most likely candidate to buy or receive business and why? Additionally, in this phase, we discuss, evaluate each of the options for moving forward. Every step of the way, we help with strategic thinking and swift decision making.

3. Create the Plan

At this phase, we create the comprehensive plan to reach the goals and objectives of the business owner. We determine what is needed to generate maximum business value. We evaluate what is needed to establish a clear succession plan to the desired emerging leadership. It must be determined whether the successor(s) will need to be trained to be successor owner(s) or just successor manager(s). Additionally, we will work with your estate planning and tax advisors regarding your estate and how the plan will be affected by the overall plan and the best way to minimize the tax effect. Other aspects include identifying the needed financing options and securing key employees with employee compensation plans or sale/stay bonuses. Preparing the business from a leadership succession as well as from a financial standpoint. This process often involves changing the governance structure and improving processes and accountability so the business is prepared to function in the future without the current CEO/owner.

4. Plot the Timelines and Milestones

Once the plan is created, we mark the timeline and milestones in order to meet the overall goal of the transition. Depending on the circumstance, it can be between 3 months and 10 years. We set up regular check-in meetings and project timetables to keep the project on schedule. Knowing the critical path to all of the milestones is essential for success and we utilize the most up-to-date tools and software to assist with the process. Knowing where we are going is only half of the story, we must also know when we will get there.

5. Execute the Plan

Now the plan is created, the timelines established, and it is time to execute the plan. In order to implement the action plan in small, manageable pieces, we break down the overall plan into strategic objectives and action items. In the event of an outside sale, we prepare the company for sale and take it to market. When the need arises, we prepare letters of intent or evaluate the offers you receive. Throughout, we aid you by managing the negotiation process and assist with due diligence, as needed. We will facilitate the transaction closing and help execute any last minute needs.

Buying or selling a business or business ownership can be a sensitive matter. Whether it is a private buyout or an employee purchase like an Employee Stock Ownership Plan (ESOP), we take a holistic approach to keeping the company moving forward during transitions. We take much care in discovering the best way to execute a plan that is a win-win for all involved while keeping the business running at maximum potential. Workman White works with you to understand your objectives and develop a comprehensive strategy to meet your goals.