Succession Planning

You spent your career building a business that is profitable and popular and makes you proud. As rewarding as your career is at some point you will want to retire.

Business succession planning is a complete financial strategy for your business and personal situation when you plan to step down as owner. The planning helps you make important decisions about what happens to your business, and creates a smooth transition to the new owners while maximizing the tax or financial advantages to you.

A strong succession plan establishes goals and expectations, creates a sustainable decision-making process, defines the succession plan and includes an alternate estate plan in the event succession happens after death.

Each company is unique and will have its own plan to execute, but there are only two options – and we can help with both!



Family businesses often have intimate and complex histories and cultures as the definition of what constitutes a family becomes less traditional. This is just one of a number of issues, that can interfere with the successful transfer of a family business to the next generation. However, with a little focus, planning and attention to details these issues can be mitigated. Family-owned businesses make up 30% of the Fortune 500 companies. So it’s not just the mom and pop businesses – ATCO, Canadian Tire, Loblaw’s, Husky Energy and Rogers Communications are all family owned companies.

Forbes Magazine reported that when considering transferring a family business the key issues include:

  1. Generational transition. Only a third of all family businesses successfully make the transition to the second generation.
  2. Alignment of family interests. Alignment of interests between current owners and others becomes more pronounced as members retire and turn over the reins to the new generation, while at the same time looking to the company for their retirement income.
  3. Balancing of financial returns. Creating buyout agreements is challenging. When the retiring generation looks to the value of their interest, they sometimes tend to look to a balance sheet number. In fact, the true value of a business should probably be based on an earnings capitalization model, a concept unfamiliar to many smaller family companies.
  4. Interfamily disputes. The interest of one family member may not be aligned with another family member. These situations can become even more difficult where there is, for example, a divorce of a family owner or a death and the surviving spouse is holding stock (and voting rights) but is not involved in the business.
  5. Estate and Inheritance issues. These include taxes and probate delays upon the death of a family owner.”

At Erven Planning, we can help with these aspects of your succession planning: minimizing tax burdens or estate complications, and identifying problems you may not be aware of.

We can help you develop a sound succession plan that will improve your family business’ chance of surviving for the next generation.



If you decide is to sell your family business someone will value it in business terms. You may place a value on it but that may not be realized. Your business is only worth what someone will pay for it. If a business is going attract buyers at the best price, you want it to be in excellent financial health.

Laura McNally, owner of the McNally Brown group, who offer advice to family businesses that sell, says:

“Many owners underestimate the effort needed to prepare a company for ownership succession and the scrutiny of a buyer. They often think a fresh coat of paint is all it takes or that the business will sell itself. However, this may not get you the best price or the right buyer. Selling a business and planning for succession is emotional,” Ms. McNally says. “It creates not only work stress but family stress as well. That’s when you need to lean on your advisers.”

At Erven Planning, we will work with you and your other advisors to develop the right succession plan for your company at the right price – ask us!