Succession Plans Help Lead to Continued Business Success

MILWAUKEE, Jan. 24, 2012 /PRNewswire/ -- American small business owners are not prepared to face the inevitable. Fewer than 30 percent of family-owned businesses make it to the second generation, about 15 percent to the third generation and only 3 percent to the fourth and beyond, according to a 2009 study conducted by The Family Firm Institute, Inc. Unfortunately, most of these vital American economic engines have not planned for changes in leadership.

Although companies should consider planning for succession five to 10 years before a transition is expected to take place, many small business owners find themselves heavily focused on day-to-day business operations, especially in economically challenging times, and do not invest the time necessary to develop a comprehensive succession strategy.   

This is a great concern, as the U.S. relies on the more than 20 million small businesses that employ half of the American workforce, to support the economy and gross domestic product.

"It's never too early to begin succession planning, particularly when you consider that fewer than half of those expecting to retire in five years, and one-third of those expecting to retire in the next ten years, have actually named a successor," said Kara Kaiser, regional president at M&I, a part of BMO Financial Group. "In order for business owners to ensure their business continues to thrive, succession planning should be a priority that mitigates risks associated with economic uncertainty or a sudden shift in management."

Kaiser offers small business owners the following advice to get them started down the path of succession planning success:

Start early – Succession planning must begin at least 10 years in advance in order to realize the full potential value of the business and to ensure a smooth transition to new ownership.

Consider all your options – Whether a small business owner chooses to sell, transition to a family member or business partner, or dissolve the business, there are many complex issues that need to be evaluated before a decision is made. 

Speak with a financial advisor – Each business is unique; a succession plan should reflect this and be tailored to the particular aspects of a business. A financial advisor can help small business owners develop tailored solutions and the ideal succession strategy to meet their business needs. When consulting with an advisor, consider the following: who should succeed you in your role; when would be the ideal time to begin the transition; how should the transition be structured; and what are the short- and long-term financial implications?

About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through approximately 700 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida.  BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S.  Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.

BMO Harris Bank is a trade name used by BMO Harris Bank N.A. Banking deposit and loan products and services are provided by BMO Harris Bank N.A. Member FDIC. Brokerage products are offered through Harris Investor Services, Inc. (HIS), a registered broker/dealer, member FINRA/SIPC, and SEC-registered investment advisor. Insurance products are offered through Harris Bancorp Insurance Services, Inc. (HBIS). Investment banking services are provided by BMO Capital Markets Corp. (BMOCMC) and BMO Capital Markets GKST, Inc. (GKST), a Municipal Bond Dealer and member FINRA and SIPC. Financial planning and investment advisory services are provided by Sullivan, Bruyette, Speros & Blayney, Inc. (Harris SBSB), an SEC registered investment advisor. Family Office Services are provided by Harris myCFO, Inc. Investment advisory services are offered by Harris myCFO Investment Advisory Services LLC (Harris myCFO), an SEC-registered investment advisor and wholly-owned subsidiary of Harris myCFO, Inc. Stoker Ostler Wealth Advisors (Stoker Ostler) is an SEC-registered investment advisor. Investment advisory services to institutional clients are provided by Harris Investment Management (HIM) or its wholly-owned subsidiary HIM Monegy (Monegy), SEC-registered investment advisors. Products offered by HIS, HBIS, BMOCM, Harris SBSB, Harris myCFO, Stoker Ostler, HIM, and Monegy, which are affiliated companies and wholly owned subsidiaries of BMO Financial Corp.,: Are not insured by the FDIC or any Federal Government Agency, not a deposit of or guaranteed by any Bank or Bank Affiliate, may lose value. The purchase of insurance or an annuity is not a condition to any bank loan or service. Not all products and services are offered in every state and/or location.

SOURCE BMO Harris Bank

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED