Succession Planning is for Businesses in Every Stage

No matter what stage of the business life cycle your company is in, if you don’t have a succession plan, now is the time to prepare one.

The Investment/Startup Phase

Leadership changes can significantly impact an organization in the early stages, and having a succession plan now can add stability to your business. In this phase:

  • Identify roles that would require a succession plan.
  • Document and communicate a plan.
  • Establish a culture of cross-training and knowledge sharing.
  • Have proper buy/sell and operating agreements in place.
  • Maintain appropriate insurance to support agreements.

The Growth Stage

As your business moves into greater volumes and profitability, you can make strategic decisions for the future. Even if a transition is a long way off, now is a valuable time to turn an eye toward the future. In this phase:

  • Consider your staffing pipeline for future successors.
  • Enhance management expertise through leadership development.
  • Make sure your company’s retirement plan fits.
  • Consider your personal legacy planning and retirement savings vehicles.
  • Evaluate your succession plan.

The Maturity Phase

As your business becomes increasingly mature, so should your succession plan. Don’t wait until you’re preparing for a merger or exit strategy to consider one. In this phase:

  • Ensure ownership documents and records are accurate and complete.
  • Identify, analyze, and address risks.
  • Evaluate buy/sell agreements.
  • Groom succession candidates.
  • Solidify your personal estate plan and consider future wealth transfers.
  • Anticipate the effects of future events on your personal finances.

The Transition Phase

Once your succession plan becomes a reality, as a business leader, you’ll transition from having active involvement in your company to preserving the value you’ve created. In this phase:

  • Execute succession plan and transfer leadership.
  • Consider noncompete terms and agreements.
  • Transfer wealth.
  • Consider family transitions and education.
  • Evaluate personal tax, estate, financial, philanthropic, and lifestyle planning.
  • Plan your next chapter.

The Post-Transition Phase

After succession is completed, your financial landscape and community impact take center stage. You may even consider making new investments or launching a new venture. In this phase:

  • Consider your goals, what will be required to achieve them, and the impact on your finances.
  • Organize a plan for your family, finances, estate, and charitable causes.
  • Seek expert help to maximize your goals.

The Expert:

Sandy Coaker serves as the Office Managing Member for Warren Averett’s Montgomery office and on the firm’s Operations Board. She has over 30 years of experience providing tax, consulting, and advisory services to privately held companies in a broad range of industries, including construction, healthcare, and professional services.


Sandy Coaker / 334.387.3619 / [email protected]