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 - October 4, 2018

• Economy Looks Good - Following Jerome Powell’s description of the U.S. economic outlook as “remarkably positive”, people are wondering how long this “rosy” period might last.

• Canada, Mexico, U.S. New Trade Deal - Canada has agreed to join the U.S. and Mexico in a trade deal that will replace NAFTA, according to officials.

• Honda Takes Stake in GM - Honda Motor Co will invest $2 billion & take a 5.7% stake in General Motors' Cruise self-driving vehicle unit, to jointly develop self-driving vehicles for deployment in ride services fleets around the world.

Financial and Economic Brief - September 4, 2018

• New NAFTA Deal without Canada? - The Canadian dollar fell against the U.S. dollar after President Trump said the U.S. and Mexico could move forward without Canada in a new NAFTA deal.

• China Lures Talent from Taiwan - A veteran engineer of one of Taiwan’s top-tier chipmakers took an offer from a Chinese state-backed chipmaker last year and now oversees a small team in eastern China.

• Tesla’s Stock Price Forecast Slashed - JP Morgan Chase cut its price target on Tesla, causing its shares to briefly tumble.

Financial and Economic Brief - August 7, 2018

• 5% Treasury Yield Warning - JPMorgan Chase & Co. chief executive officer, Jamie Dimon, warned investors that they should get ready for U.S. yields of 5 percent.

• Oil Rises after Production Falls - Oil rose on Monday after Saudi crude production fell in July and U.S. drilling appeared to slow down, although the price is still almost 10 percent below its 2018 high of more than $80 a barrel.

• Pepsi Co. CEO Stepping Down - Indra Nooyi, PepsiCo. CEO, is stepping down but will remain as chairwoman of the board of directors until early 2019.

Financial and Economic Brief - July 3, 2018

• Consumer Sentiment Rises - Chief Economist for The University of Michigan's survey Richard Curtin said one-in-four consumers mentioned the potential negative impact of tariffs on the domestic economy.

• ADM in Talks with Neovia - Archer Daniels Midland Company (ADM) is in talks to take over French animal feed business Neovia for 1.5 billion euros ($1.75 billion) in order to expand in the animal nutrition sector.

• Tesla Meets Production Target - Tesla's first mass production vehicle missed two Ņambitious' production targets, but Musk promised investors that the company would make 5,000 Model 3s per week by this time of year.

Financial and Economic Brief - June 26, 2018

• Harley-Davidson Moving Some Production Overseas - The EU launched tariffs on American imports like bourbon, peanut butter and orange juice on Friday.

• Oil Prices Fall - Brent crude oil fell by more than 1% today as investors prepared for an extra 1 million barrels per day (bpd) to hit the markets after OPEC and its partners agreed to raise production to “stop the gap” between supply and demand.

• SEC Probes Earnings per Share - The SEC is investigating whether publicly traded U.S. companies have been rounding up their quarterly earnings to the next highest cent.