Planning for SUCCESS(ion)

By Alyssa J. Skoyen, J.D., VP & Personal Trust Officer

You’ve put endless hours into ensuring your business is successful. You’ve carefully cultivated its growth and profitability every step of the way, and it has flourished under your leadership.

But, what will happen to your business when you or others step down from leadership roles?

What is succession planning? 

Investopedia defines succession planning as “a strategy for passing each key leadership role within a company to someone else in such a way that the company continues to operate after the incumbent leader is no longer in control” and “ensures that businesses continue to run smoothly.” At the heart of succession planning is replacement planning:

  • Evaluating the skills of current leadership
  • Determining the availability of internal or external successors
  • Purposefully developing the skills of any internal candidates

Why does succession planning matter?

Succession planning is sometimes referred to as “continuation planning” for its vital role in ensuring that businesses continue to exist despite a transition in management or ownership.  More than just planning for who will inherit key roles, succession plans:

  • Provide a medium for businesses to detail how they will minimize potential tax liability
  • Maintain the value of company stock and assets
  • Ensure lending covenants remain fulfilled during a transition

Succession plans are also a useful vehicle for contemplating how to preserve adequate liquidity and cash flow despite the potential need for “stay bonuses” to retain top employees and, in the case of a CEO who was taking a small draw, substantially higher expenses to replace the principal.

Similar to business plans, a succession plan is a means to an end, not an end in itself. The true strength of a succession plan lies in its implementation.

What can go wrong without a plan?

Short answer: everything. Without a succession plan, the business is put at risk as its stakeholders scramble to hold the pieces together through a series of desperate, rushed decisions. In the oft-quoted words of Sir Winston Churchill, “He who fails to plan is planning to fail.”

I need a succession plan… Now what?

Congratulations!  You’ve taken the first step in ensuring the longevity of your business’ success. The succession planning process will no doubt vary depending on the size and structure of your business, but key starting blocks are:

  1. Involving your business’ stakeholders
  2. Assessing availability of internal and external candidates
  3. Pulling together a team of professional advisors including your attorney, CPA, and others to assist in planning and implementation

If you would like more information about getting started with succession planning, contact me directly at (608) 826-3505 or

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Buy a Business from a Baby Boomer!

Family business

By: Visar Salihu, Business Banker

According to the California Association of Business Brokers, Baby Boomers are on the verge of selling almost 12 million businesses over the next 10 to 15 years. This obviously represents a significant opportunity for Gen X and Millennial’s with entrepreneurial aspirations of their own.

The best opportunities may lie with businesses that are ready to be transferred to 2nd Generation family members due to an impending retirement, but there are also going to be a lot of Baby Boomers who don’t have a family member in line. Find a business that you’re passionate about and make sure that it can adapt to one important thing – technology!

Here are some benefits to consider when purchasing an existing business:

  • Proven Concept – Buying a business with a proven concept is less risky. Buying a business with a proven concept that’s been around for a while is even less risky (although there’s always risk!).
  • Recognition – It’s likely that you’re buying a business with a recognized name already. That’s huge!
  • Equipment – If equipment has been updated recently, the business will have a more seamless transition. You can then focus on improving and growing the business immediately.
  • People – In addition to getting knowledgeable existing employees, you can also have the existing owner stay on for a year or so to show you the ropes (looks great to banks!).
  • Customers – The business has existing, loyal customers! You need to make sure to continue to nurture those relationships.

There is a great deal of initial due diligence, but the most important task is to make sure the business has been (and will continue to be) financially stable for quite some time. I’d advise getting expert help with financials. Then, research if there will be continuing demand for that type of product or service. For instance, if the business is a VHS rental store, then I’d recommend you move on. If you’ve identified ways to make the business better or continue its mission, then you’re on the right track.

There is always risk when you decide to become a business owner, but it’s your job to find ways to minimize it. (Let me repeat: Don’t buy a VHS rental store.)

The Education Center on our website has more information about the pros and cons of buying an existing business, as well as how to get started. If you’d like to talk about buying a business or have a specific opportunity to evaluate, I invite you to contact me with any questions at

 Member FDIC.