Succession Planning
Hand off your business on your timeline, with the numbers in order
Most owners hand off their business once. Succession planning is making that decision on your timeline, with the numbers in order, instead of under pressure when health, a partner or a buyer forces it.
Whether the business goes to an outside buyer, to family or to your management team, the same things decide the outcome. What the business is worth, whether it runs without you and how much of the price you actually keep. We help owners of closely held and family businesses work through all three, years before the handoff.
Three ways to hand off a business
Sell to an outside buyer. A strategic buyer or a private equity firm often pays the most, and checks the most. Clean books and a quality of earnings review before you go to market protect the price. See Prepare to Sell / Exit Readiness.
Pass it to family. The value still has to be set and defended, and the transfer has to work for tax and estate purposes. We build the numbers and work alongside your CPA and estate attorney on the structure.
Sell to your management team. Managers often don’t have the cash to buy outright, so a lender, an investor or the owner usually finances part of the price. The forecast has to hold up to a lender, and the business has to show it can carry the debt.
Start with three questions
Owner Ready. What do you want from the handoff, and what comes after it? We help you think through the transition, the tax and life after the sale.
Business Ready. Do the revenue, the financials and the management team stand up without you in every decision? Buyers and lenders pay more for a business that does.
Market Ready. What are buyers in your sector paying for today, and what are they discounting? That tells you whether to go now or build value first.
What we do
Find out what the business is worth. Our Enterprise Value Diagnostic shows where value sits today and what would lift it. See Enterprise Value Diagnostic.
Get the books ready. Audit-ready financials, GAAP-compliant policies and a quality of earnings view of your numbers, before anyone else reviews them.
Move what only you know. Banking relationships, pricing, key customers and the forecast often live in the owner’s head. We put them into reports and processes the next owner can run.
Build value before the handoff. Margin, working capital and cash flow improvements that raise the number a buyer or lender is valuing. See Grow Enterprise Value.
Keep more of the price. Holdbacks, escrows, indemnities and working capital adjustments can take money back after closing. We find the issues that trigger them first.
When to start
In our experience, a year ahead is the minimum, and longer is better. Buyers judge margin and working capital on trailing performance, so the improvements have to show up in the numbers well before a sale. If you’re within a year, there is still work worth doing, and the sooner it starts the more it’s worth.
Proof
Across the team, Everest has closed more than 50 M&A transactions, buy side and sell side, with combined transaction value of more than $55 billion. The Managing Directors who lead this work have built the financial story, run the data room and sat across from buyers and their advisors.
Questions owners ask
How is succession planning different from selling my business?
A sale is one way to hand off a business. Succession planning covers every option, including family and management, and starts with what you want after the handoff.
When should I start planning?
In our experience, a year ahead is the minimum, and longer is better. The numbers a buyer or lender reviews are trailing, so value has to be built early.
Can I sell my business to my management team?
Yes. It usually takes outside financing or seller financing, so the forecast and the cash flow have to support the debt. We build the model and the reporting a lender will want to see.
Does Everest handle the tax and estate planning?
We work alongside your CPA, estate attorney and wealth advisor. We build the financial side and the valuation they work from.
Where do I start?
Take the free Exit Readiness Check. It takes about two minutes and shows you where the gaps are. See Exit Readiness Check.
Let's talk
The best time to plan your succession is well before you need to. We’ve sat in your seat. Now we’re in your corner.
