Business succession planning

Business succession planning Cultivating enduring value

All six volumes in one collection

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Contents

5 Introduction 6 Volume 1: The need for planning 14 Volume 2: Establishing a foundation 26 Volume 3: Developing future leaders 34 Volume 4: Preserving personal and family wealth 50 Volume 5: Family dynamics and governance 64 Volume 6: Cementing a legacy

4 Business succession planning

Introduction

The operational demands of running a family business or other closely held enterprise can be all-consuming, but it's vital that business leaders take the time needed to assess their organization's business succession planning. The penalty for failing to get ahead of leadership or ownership changes can be significant, as the coming years may bring substantial transfers of wealth as businesses change hands and adopt new ownership structures. The long-term survival of a business, and the preservation of the wealth that has been built, will likely depend on getting ahead of those changes through strategic succession planning.

For private, owner-managed, or family-owned businesses, a solid succession plan can drive the growth of the business, reduce taxes, and set the stage for retirement. Family-run businesses may benefit further by focusing on preserving harmony within the family.

This publication is a compilation of a six-volume series that addresses the broad range of topics that business owners need to consider in order to facilitate an orderly transition of management and ownership, including:

? How a strategic, long-term approach to business succession planning can help meet personal and business goals -- and how to get started.

? How the choice of entity structure, valuation methods and financing options can impact succession planning -- and outcomes -- for private businesses.

? How management talent assessment, development and compensation planning can help solidify the next generation of company leadership.

? How planning ahead for estate and gift taxes, life insurance and investments can help address family and business needs and meet retirement goals.

? How to balance business needs and family concerns in order to create a long-term governance plan that can help the business and family prosper together.

? How adopting leading practices and strategies can help confirm one's legacy isn't left to chance.

Taken together, these issues demonstrate that succession planning is an important and evolving process. This is not a subject to be put off until later; to be done successfully, it needs to be an integral part of a company's business strategy and operations.

This publication is a compilation of a six-volume series that addresses the broad range of topics that businesses owners need to consider in order to facilitate an orderly transition of management and ownership.

Cultivating enduring value 5

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