Succession Planning – Case Studies

A company came to us to help structure the transition from father to his son who had worked in the business for many years.  They had been talking about undertaking this step for several years, but had not made any real progress.  So far, the family discussions had centered on how much money Dad would need in retirement, and whether or not the company could afford to pay it.

BFR started by asking the father what he would do in retirement, whether he wanted to stay involved in the business or be completely out of it, and who would take over his duties leading the sales effort of the company.  We have found that business transitions move forward when all parties have a more concrete vision of what is coming next.

Initially, it appeared that the father would have to hold significant paper if he was to realize the value he believed to be inherent in the business.  Ultimately, it was decided that the building, owned jointly by father and son, would be transferred to the father as part of the transition.  Building ownership lent itself to a passive management role more consistent with the father’s stage in life while providing a steady income stream.  BFR was also able to find a bank that would finance the purchase of the father’s shares so he didn’t have to hold any paper at all.  At that point, the transaction came together quickly.  BFR has stayed on as a financial advisor to the son and the business has continued to prosper.