Food Processing & Agriculture manow
Business Succession:
Passing the Torch,
Not the Buck
Jay Silverstein, Partner, and Mark Steranka, Director of Policy
and Planning, Moss Adams LLP
The long-term success of a company is fueled
by solid leadership and sound management
decisions. No doubt your company has invested
significant time and resources in shaping a
talented team of leaders to drive profitability,
promote your unique culture, and set an example
for others in the organization.
But what happens when key leaders retire?
Or when you want to sell all or part of your
ownership interests and exit the business? In
those situations, how can your company maintain
its competitiveness and culture?
By establishing a well-defined succession plan.
With a solid strategy in place to identify, develop,
and groom the next generation of leaders and
owners, your company—large or small—is
more likely to achieve longevity and success.
Indeed, those who can translate their vision for
long-term prosperity into a detailed succession
plan can not only resolve uncertainties about
the future of the business but also enhance the
company’s long-term performance and health.
A plan can also help the company prepare for
other future challenges, such as securing access
to capital. Beyond assessing whether a business
has a sustainable competitive advantage,
dependable cash flow, and solid net worth,
financial institutions often look for a succession
plan when determining the amount of credit
to extend. A formal plan, accompanied by the
development of key successors, will go a long
way toward demonstrating long-term financial
viability to your bank or other lender.
While succession is a natural stage for most kinds
of businesses, it can represent unique territory
to owners of privately held or family-owned
food processing and agricultural companies. For
those owners in particular, the success of the
business can be much more closely tied to their
personal wealth, so a transition of the business
to a successor is one that can greatly affect their
personal future as well as that of their family.
Where to Begin?
Start with written goals that establish a
timeline for your exit, identify your successor’s
responsibilities, and determine what credentials
the successor should possess. These goals will
ultimately serve as benchmarks you can use
to track progress and guide future business
decisions.
