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Succession Planning

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Neil Stalter

Fact: You will exit your business. Question: Will it be voluntary or involuntary? Let’s face it, everyone exits their business one day. The goal is to exit on your terms. That’s why succession planning is critical.

Exiting your business is a process, not an event. The process starts with defining your goals. When do you want to exit your business? How much will you sell the business for? How much do you need received from the transaction to support your lifestyle post-sale?

After you’ve defined your goals, it’s time to choose your successor. Will you transfer the business to a family member? Will you sell the business to a key employee or to a third party? Will you stay on as a consultant and gradually taper off? Will you gift some or all of the business? Do you need/want the business to continue to provide you income? How do taxes affect the different strategies?

Next, develop the succession plan and protect your wealth. Estate planning is a key component to the plan. You want to ensure that your plan is protected against premature death or disability, market changes and taxes.

Then you need to know the value of the business. There are many ways to value a business and it is critical to the plan to understand. Will you discount for a family transfer? Will goodwill be involved?

Lastly, you’ll need to determine how to fund your strategy. Will you utilize stock and/or ESOPs? Will it be a straight cash buyout? Will the buyer obtain financing through a lender or you? Will you utilize insurance?

When should you start planning your exit? Think of it like this. If you had to run a race, do you want more time or less time to finish? Obviously, we would all want more time to plan anything because with more time we usually make better, more well thought out decisions. , You can change or alter the plan should your goals change.

With so many questions to consider, it is important to be strategic and intentional. Don’t go it alone. At Diamond State Financial Group we have been helping business owners work towards their goals since 1989. Our skill along with our experience help business owners implement and execute their plan on their terms. To get started on your succession planning and to find out how we can help you align your business and personal goals, contact Neil Stalter, CFP®, ChFC®, CBEC® at 302-366-0366 or [email protected].


Diamond State Financial Group does not provide business valuation. Business valuations are accessed through a third party relationship.

Financial Professionals do not provide specific tax/legal advice and this information should not be considered as such. You should always consult your tax/legal advisor regarding your own specific tax/legal situation

Neil is a Registered Representative and Investment Advisor Representative of Securian Financial Services Inc. Securities and Investment Advisory services offered through Securian Financial Services Inc. member FINRA/SIPCDiamond State Financial Group is independently owned and operated.  121 Continental Drive, Suite 110, Newark, DE 19713

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