Business Succession

Ready to hear a reality check from other business owners?

  • Nearly three-fourths of privately held manufacturing firms in the U.S. were formed between 1960 and 1980.
  • Only about 14% have a succession plan in place for their company if they should die or become disabled.
  • Half of all business owners expect to sell their businesses to an outside buyer when the time is right.
  • At any given time, 20% of privately owned businesses are for sale and only one in four will actually be sold.

Here's what is important about these stats*. When we ask business owners when they see a major transition in the ownership of their businesses, most of them reply, "Five years." Suppose they don't start the plan today, then next year it will still be five years out and the year after that another five. Meanwhile the statistics imply that with every passing year the market for business sales will become more and more crowded.

* John H. Brown - Cash Out Move On: Get Top Dollar, and More, Selling Your Business

Every successful exit strategy requires tough questions and careful advance preparation.

  • What's the value of my business today? Is that what I think it's worth or what the marketplace would think?
  • How can I preserve the value through more effective financial and operational management?
  • How can I protect it from creditors?
  • How can I promote its value through value drivers?
  • How can I prepare for acquisition - either cash or note or other option? For a merger? For an IPO?
  • How can I manage contingencies - loss of shareholders, key people, financial resources, intellectual assets, customers?
  • How will I manage the new family asset my business becomes?

We have walked many business owners through these concerns to start the planning process and monitored progress as the plan progresses. For virtually all of them, the business represented the largest single asset in their estate which then led to integration of business and estate planning. No surprise - the commitment to planning your exit from the business mirrors your commitment to building it.

Office Location

DavisWalker, Ltd.

9100 Arboretum Parkway
Suite 260
North Chesterfield, VA 23236-3493
ph: 804.560.8082

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News Updates

Financial and Economic Brief - May 8, 2019

• Trump Threatens 25% Tariff Hike - Currently, the 10% tariff on $200 billion in Chinese imports has been a “nuisance”, with many US businesses absorbing the cost.

• Job Openings Rise Sharply - U.S. job openings rebounded sharply in March, while the pace of hiring was level, pointing to a growing worker shortage that could slow employment growth this year.

• Digital Ad Revenue over $100 Billion - A new report says internet advertising revenues in the U.S. totaled $107.5 billion in 2018.

Financial and Economic Brief - April 2, 2019

• Economic Growth, Slowing - Consumer spending rebounded less than expected in January and incomes rose modestly in February, suggesting the economy is losing momentum.

• U.S. Crude Hits High - U.S. crude oil hits a 2019 high and Brent crude gained a dollar after tight supply and positive signs for the global economy drove the largest Q1 gains for both benchmarks in nearly a decade.

• Factories Stockpile for Brexit - UK factories stockpiled goods for Brexit at a surprisingly high rate last month, increasing manufacturing growth to a 13-month high.

Financial and Economic Brief - March 6, 2019

• Construction Spending Falls - The U.S. construction spending fell 0.6% in December as investment in both private and public projects dropped, indicating that the economy “lost momentum” at the end of 2018.

• China Cutting Taxes and Increasing Lending - China is trying to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending.

• GE On Decline - GE’s (GE) stock is down by nearly two-thirds since the end of 2016 and the company has fallen to the 59th most valuable in the S&P 500.

Financial and Economic Brief - February 5, 2019

• Fed “Pauses” Tightening - The financial markets are concerned about a slowing economy, and the Fed chairman has sought to reassure investors.

• General Motors Cuts Jobs - General Motors is expected to start its next round of white-collar job cuts this week, but there are fewer staff reductions left to make than were anticipated.

• Ultimate Software Agrees to Buyout - Ultimate Software Group Inc., a cloud-based human resources applications developer, said on Monday it agreed to be bought by an investor group for about $11 billion.

Financial and Economic Brief - January 8, 2019

• Job Creation Hot in December - Job creation surged by 312,000 in December though the unemployment rate rose to 3.9%.

• A New Exchange, MEMX - Morgan Stanley, Fidelity Investments, Citadel Securities & a group of other financial companies have agreed to jointly launch a new low-cost “bourse” that will compete with the NYSE & Nasdaq.

• Eli Lilly to Buy Loxo Oncology - Eli Lilly and Co. announced Monday it will acquire Loxo Oncology for about $8 billion in cash.

Financial and Economic Brief - December 4, 2018

• Trade Agreement Truce - Markets rallied on news that President Donald Trump and Chinese President Xi Jinping, had reached a “truce” in the trade battle.

• Car Sales Fall - Several carmakers including Ford, Honda and Toyota reported a drop in new car sales in the U.S. in November.

• Qtar Pulling Out of OPEC - The small, “gas-rich state” of Qatar said that it will leave OPEC on January 1 after nearly 60 years.