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Updated: May 5, 2025 How To

How to set yourself up for succession success

By Drew Oestreicher

The global tumult of recent months has caused many small business owners to rethink their personal and professional timelines, as well as their succession plans. With all the uncertainty, it’s hard to know whether to hit the brakes or the accelerator. While there are no easy answers, there are some steps you can take now that will set you up for succession success. Even if you’re nowhere near the exit, taking these steps now will offer valuable peace of mind.

Spinnaker Trust
Drew Oestreicher

Look to your leaders. Whether you’re considering transferring ownership to a family member, working with a strategic buyer, selling to another company or converting to an Employee Stock Ownership Plan (ESOP), you’ll want to have some sense of who on your team would lead day-to-day operations after you leave. Who are the key members of management with institutional memory who can lead, mentor and manage staff, and sustain strong relationships with customers and vendors? Look at who you have, and their willingness and ability to lead once you’ve stepped aside. What kind of training and mentorship will they need before they’re ready to take the helm?

Get to know your worth. There is often a sizeable gap between what an owner thinks a business is worth and what the market will actually pay. Factors like tax rates, tariffs and interest rates can significantly impact valuation. The only way to truly understand the resale value of your business is to get an independent valuation by an accredited business appraiser. Look for designations like Accredited Senior Appraiser (ASA), Certified Business Appraiser (CBA) and Certified Valuation Analyst, each indicating the person has the appropriate training and experience. No matter what your succession timeline is, the process of gathering your financial statements, and vital details about operations, customers, suppliers and competitors will provide clarity about what comes next.

Invest in success. The valuation will help you understand what types of investments you need to make in equipment, technologies and professional development to optimize your operations. Making these investments will help the business thrive in the short term and set it up for a sustainable future. Spending this time will create more value within the company, and ensure that your organization is valuable, transferrable, ready and attractive whenever the time is right to move forward with succession.

Think about the personal impact of your next steps. For many small business owners, personal and professional finances are closely linked, and they may not realize how much they rely on the business financially until it’s time to retire. Even beyond the income you draw, factors like business expenses and tax deductions can significantly influence your lifestyle. Will you need to adjust your lifestyle after the sale, when you’re no longer taking an income, writing off business expenses, or driving a company car? Think about what you want that chapter to look like. Do some financial planning to make sure you can get the retirement you’ve envisioned.

Talk to the experts. It’s unlikely that one professional will have all the expertise you need to think through your company’s future. You’ll need to involve many different specialists in areas like taxes, insurance, and personal financial planning. Partner with a trusted advisor who can bring all these specialists together, help you digest all the information they provide, and determine your next best steps.

Drew Oestreicher is a principal, senior vice president and senior client advisor with Spinnaker Trust in Portland. He is a certified exit planning advisor.

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