Guide
Succession Planning 101 for Business Owners
What it means to plan a succession, the paths owners commonly take, and the questions that help you choose one.
A succession plan answers one question: who leads the business next, and how does it get there? A sale is one part of the answer. The rest is who takes over, when you hand over, what happens to your team and customers, and how you're paid for what you built.
The paths owners commonly consider
- Family. A son, daughter or relative takes over. It keeps the business close, but only works if someone in the family wants to run it and can.
- Employees or managers. A key employee buys the business. They know it well, but they often can’t raise the money. And who will guide them once you’re gone?
- A competitor or larger company. Often a quick sale, but the name, the team and the way you do things may not survive the merger.
- A sale through a broker. The business is listed and marketed to buyers. A commission comes out of the price, and word can get out to your employees and customers that you’re selling before you’re ready.
- Closing the business. Selling the equipment and closing the doors. It's the simplest path, but it leaves the most value behind.
Questions to ask yourself
- Decide what matters most: the price, your team, your customers, your name, or your time.
- Picture your next chapter. How involved would you like to stay, and for how long?
- Ask who could run the business without you, today or with some training.
- Talk with your family, then with your own attorney and CPA, before you talk with buyers.
Why starting early helps
An owner who starts a few years ahead has time to tidy the records, train key people and choose a path, not just accept the first offer. Health, family or an unexpected offer can force a decision on someone else's timeline. A plan made early keeps the decision yours. Our Planning ahead page has a checklist.
How Ojenta does it
- You share in the growth. When Ojenta buys a business, the Seller keeps a share of the business's future profit growth for as long as it runs. If the business is ever sold, your share is paid out. The amount depends on how much the business grows and how profitable it stays.
- Ojenta is the buyer. No broker, no commission, and your business is never listed or marketed.
- You approve who leads it. Ojenta teams with a Protege, the person who will lead your business next, and a Mentor who guides them. Both are named in the deal you agree to.
- Your name carries on. The business keeps operating under its name, with your team and your customers.
- A framework for the unexpected. If the Protege cannot run your business within the first year after closing and no successful replacement can be found, you can choose to take your business back, with no foreclosure and no court. The final agreements set out when this applies.
In short
A succession plan decides who leads next, when, and how you're paid. Starting early keeps those decisions yours.
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Guides are general information, not legal, tax or financial advice. Talk with your own attorney and CPA.