The Real Owner’s Guide to Business Succession Planning: What Every Entrepreneur Must Know

Why Business Succession Planning Matters More Than You Think

Being a business owner is not for the faint of heart. You’ve taken risks, survived the valleys, and built something that not only provides for your family today — but could support generations if you plan wisely.

Yet Business Succession Planning is often the last thing owners tackle. You’re busy solving today’s problems — who has time to think 10 years ahead? But here’s the thing: Without a plan, you’re gambling with everything you’ve built.

A smart succession plan isn’t just about selling — it’s about:

• Protecting your family from chaos and tax surprises.

• Keeping employees and partners whole when you step away.

• Maximizing the value of your life’s work.

• Locking in your legacy, on your terms.

  
  

At Moment Private Wealth, we see it all the time: business owners who wait too long, then scramble when life happens. Our mission? Make sure that’s not you.

When Should You Start Your Succession Plan?

The best day to start planning was yesterday. The second-best day is today.

Good succession plans take time to design, refine, and execute. We tell owners to start at least 5–10 years before your target exit. That gives you time to:

• Train a successor (if it’s internal or family).

• Position your business for maximum value.

• Create business strategies that don’t crush cash flow.

• Minimize taxes, which can gut your payout if you’re not careful.

  
  

Life happens. Health changes. Markets shift. The sooner you plan, the fewer regrets you’ll have.

Who Needs to Be at the Table?

You can’t build a solid plan alone. These are the key players every owner should have around the table:

• Your family. Do they want to be involved? Will they inherit the business — or just the proceeds?

• Key partners and employees. If you’re selling internally, they need to know the roadmap.

• A fiduciary financial advisor. Like Moment Private Wealth — a team that works only for you, not for hidden commissions.

• A CPA. Taxes can take 30%–50% of your proceeds if you don’t plan carefully.

• An attorney. For buy-sell agreements, operating docs, and trusts.

  
  

Good succession planning is a team sport. 

At Moment, we coordinate that entire team for you, so nothing slips through the cracks.

Building a Succession Plan That Actually Works

A succession plan shouldn’t live in a desk drawer. It should be real, written, reviewed regularly, and built to hold up when life doesn’t go as planned.

Let’s break it down step by step.

Step 1: Clarify Your Endgame

Too many owners think they’ll “just know” when it’s time. But the way you exit shapes everything else, so be clear.

Ask yourself:

• Do I want to sell to an outsider for maximum value?

• Is the dream to pass it to family?

• Could a key employee or group buy me out over time?

• What’s non-negotiable? Keeping the brand? Taking care of my team?

  
  

When we work with clients at Moment, we start here. If you don’t know your final destination, no map will get you there.

Step 2: Identify Potential Successors

If you’re passing it to family or internal leaders, be honest: Are they ready? Do they want it?

Family succession can be beautiful — or it can tear families apart if you force it. We help owners get real about:

• Who has the skillset?

• Who has the desire?

• How can you mentor them over time?

  
  

Sometimes the answer is “none of the above.” That’s when an outside sale or employee buyout might make more sense.

Step 3: Value the Business Properly

Don’t guess. Your “napkin number” might feel right, but buyers (and the IRS) see it differently.

A professional valuation considers:

• Earnings and cash flow

• Market trends

• Your industry’s multiples

• Future growth potential

• Existing debts or risks

  
  

At Moment Private Wealth, we partner with top valuation pros so owners get a realistic figure, not just wishful thinking.

Step 4: Create a Funding Strategy

A great plan without funding is just a wish.

Buyouts don’t magically pay for themselves. Most next-generation owners don’t have millions in the bank.

Here are a few common funding tools:

• Installment sales. The buyer pays you over time, giving you income and tax flexibility.

• Life insurance. A policy can fund a buyout if an owner passes unexpectedly.

• ESOPs. Employee Stock Ownership Plans can let employees buy you out gradually.

• Private equity or outside investors. Sometimes the best buyer isn’t inside the company.

  
  

The right strategy depends on your goals, tax situation, and timeline. This is where real advice pays for itself.

Step 5: Put It in Writing

If you only remember one thing: Write. It. Down.

A handshake deal won’t cut it when life happens. A real succession plan should include:

• A buy-sell agreement. Clear terms on how ownership transfers.

• Updated operating agreements. So partners know what happens if someone leaves or passes away.

• Trusts and estate planning documents. To handle taxes and keep the IRS out of your family’s wallet.

• A funding plan. So there’s cash to make the deal work.

  
  

This paperwork is your business’s final insurance policy. At Moment, we make sure it’s airtight — and stays updated as life evolves.

How Taxes Can Wreck a Great Exit

Taxes are the silent killer of wealth transfers.

Without smart planning, capital gains, estate taxes, and income taxes can swallow 30–50% of your business sale.

Some strategies we help owners consider:

• Selling stock vs. selling assets (big tax difference)

• Timing sales over multiple years

• Using trusts to shift assets ahead of time

• Taking advantage of lifetime gifting exclusions

• Using charitable strategies for big gains

  
  

You built this company. Don’t leave the IRS a tip on the way out.

Common Pitfalls That Sink Succession Plans

We see the same mistakes over and over:

• ❌ Waiting too long. Health issues or sudden market downturns can force a bad deal.

• ❌ Overestimating the sale value. If your number’s off by millions, the plan doesn’t work.

• ❌ Failing to prepare the next leader. The business can collapse if they’re not ready.

• ❌ Ignoring taxes. A 7-figure surprise bill is the last thing your family wants.

• ❌ Not revisiting the plan. Life changes — so should your documents.

  
  

Real-Life Example: When a Plan Saves the Day

One of our clients at Moment was a third-generation owner of a manufacturing company. He assumed his kids would take over — until we sat down and asked them.

Turned out, neither wanted the day-to-day headaches. Good thing he asked early. We helped him pivot to an internal buyout with his COO — with a life insurance policy to back the deal if something happened unexpectedly.

The business stayed healthy. The family got paid. The team kept their jobs. That’s a win.

Bonus: Top 10 Questions to Ask When Planning Your Exit

1️⃣ Who do I really want to take over — and are they ready?

2️⃣ What’s my company really worth?

3️⃣ How do I want to be paid? Lump sum, installments, or mix?

4️⃣ What taxes will I owe?

5️⃣ Who pays for the buyout?

6️⃣ How do I protect my employees?

7️⃣ Is my spouse or family aligned with my plan?

8️⃣ What happens if I pass unexpectedly?

9️⃣ What professionals do I need to get this right?

🔟 What happens if my plan doesn’t go as planned?

FAQs on Business Succession Planning

Q1: What’s a buy-sell agreement and why do I need one?

It spells out exactly how shares are transferred if an owner dies, retires, or exits. Without it, disputes are almost guaranteed.

Q2: What if my successor can’t afford to buy me out?

That’s where insurance, installment sales, and creative financing come in. Planning makes it possible.

Q3: Should I sell to family at a discount?

Sometimes — but talk to your advisor first. Big gifts can create big tax issues.

Q4: Can I still get income if I exit?

Absolutely. Installment sales, consulting agreements, or partial buyouts can provide steady income.

Q5: What’s the biggest mistake owners make?

Waiting too long and assuming everyone’s on the same page. Spoiler: They rarely are.

Final Thoughts: Lock in Your Legacy

Business Succession Planning isn’t just another box to check — it’s the final chapter of your life’s work.

At Moment Private Wealth, we know owners only get one shot to exit wisely. That’s why we roll up our sleeves, get our hands dirty, and build plans that actually work — so you can step away with confidence.

Ready to talk exit planning? Schedule a conversation with a Moment founder today.