Planning Your Business Succession

Speaker 1 – 00:00
Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners
of this podcast will beneft as we deep dive into complex fnancial topics that we will make simplifed for you. And
we hope that this really serves as a catalyst so that you can make the best fnancial planning decisions for your
family and also save time.
Speaker 2 – 00:28
Today we’re going to talk about the challenges of transitioning a business to your children. Maybe I’ll start with the
fact that I’m in a situation like this where my father in law owns a business. He’s been running it for about 40, 45
years. And we are going through the challenges of succession and kind of who’s up next as he kind of transitions
into retirement. So it hits close to home for me. So this is a poignant conversation. Jameson. Let’s kick it off with a
statistic.
Speaker 3 – 01:01
Yeah, I think this is becoming more and more of an issue with Baby boomers are getting older. I don’t know what the
age range is of baby boomers.
Speaker 2 – 01:13
Do you know, probably 6.60 to 75, something like that.
Speaker 3 – 01:16
Yeah, I think there’s trying to remember these. These aren’t the statistics I had written down, but like there’s more,
way more people over the age of 65 than under the age of 15 or something like that. So we’re seeing this big shift in
what there’s going to be a huge wealth transfer. There is a large population that, you know, people are getting older,
they own these businesses and it’s like, what do we do with these? So just looking at some of the statistics, which I
thought these were fascinating, so I wanted to include them. Baby boomers own approximately 2.3 million
businesses in the U.S. They employ about 25 million people. 37% of business owners do not. 37% of business
owners do have some sort of advisor or somebody that can help them, guide them through the succession.
Speaker 2 – 02:11
That’s more than I would imagine. Yeah, that’s way more than I would have thought.
Speaker 3 – 02:13
And the point is that a lot of that’s 63% have no idea what they’re doing. The median close rate for listed businesses
on major marketplaces like Biz Buy Sell, which is a common marketplace between 2018 and 2022 is 6.46%. So it
means even if you’re listing it and you’re trying to fnd someone to buy it, 6% of listed businesses get sold. That’s
crazy. Oh, here we go. As of 2021, 1 in 6 people in over or 1 in 6 people are over the age of 65, which is an increase
100 years ago. In 1920 it was 1 in 20 people. So I think the point is people are having less kids now than they did 100
years ago and then 60, 70 years ago.
Speaker 3 – 03:02
Projections show that by 2048, $124 trillion will be transferred with 105 trillion going to direct heirs and 18 trillion
going to charities. 100 trillion of this is expected to be from people in the age of baby boomers or older. So those are
big numbers in the next 20 years. High net worth and ultra high net worth represent one and a half percent of
households that are anticipated to account for 42% of the wealth transfer or 36 trillion. So high net worth I think is
over 5 million. Ultra high net worth over 10 or 20. It’s basically north of 5 to 10 million in net worth would be
considered. So that makes up one and a half percent of the households which is 42% of that wealth transfer. So
bottom line, I mean big, big numbers are about to transfer.
Speaker 3 – 03:55
But there’s a counter argument to that, which I’ve heard a lot is that people are living longer now than what they used
to. So these numbers could be, if with medicine advancing and longevity and healthcare and people living longer,
this, that actually could impact these numbers drastically. But so anyway, yeah, I mean that’s the data. It’s, it’s a real
thing. Anything to add?
Speaker 2 – 04:20
No. Other than just to say it depends on the business too. Right. Yeah. Larry Ellison is what, 80? He’s running Oracle.
I still, I think he’s CEO still. But he’s got a big role in the company and he’s, I don’t think he’s going to stop anytime
soon.
Speaker 3 – 04:32
Yeah.
Speaker 2 – 04:32
Versus somebody like my father in law who’s in his mid-60s and works with his hands all day every day. And it’s not,
it depends on, you know, is it a, is it a white collar or is it a blue collar business?
Speaker 3 – 04:41
Right. That’s kind of either. At some point Larry Ellison’s going to die and like, you know, there needs to be. I’m sure,
I’m sure that, I’m sure they have a robust succession plan. Yeah. But anyway, seeing all that, some of the challenges
that arise, I mean this is a really hard problem to solve for business owners that we work with. You know, it could be
sometimes the kids aren’t even involved in the business at all. So that’s a. Then, then you got to fnd somebody else
to do it. Sometimes the kids are loosely involved and they didn’t build it, they didn’t start it and build it. And that takes
a totally different work ethic and human being to start and build a business than to run it. So some of the challenges
that arise. Two thirds of family businesses lack a documented succession plan.
Speaker 3 – 05:26
It’s hard to fnd a qualifed owner inside the family or out. Like I said, 30% of small businesses successfully sell, 70%
have no plan, which means the business basically just dies. Many owners have deep emotional attachment to the
business, making it really hard to step aside. So that delays succession plan. And even if they do fnd a succession
plan, this is probably the biggest thing I hear from business center clients that we’re trying to fgure this out is they
don’t want to give up any control. I started this business and have run it really hard for me to delegate this to
somebody else, that’s a problem. Succession planning is really complex and time consuming. And business owners
lack time. They don’t have a lot of free time and they view it.
Speaker 3 – 06:12
A lot of entrepreneurs will be, well, if I spend time doing this, I’m losing money because I’m not spending time in the
business generating profts. And that’s a problem. And then another thing from a fnancial side, it is very hard to
agree on a valuation and do this tax efciently. So even if you get past the emotional stuff, you take time to do it. The
business, whoever’s selling is going to want a really high valuation, whoever’s buying wants a really low valuation.
And then fguring out how to do this tax efciently is a whole nother beast. So we have some solutions here, but
those are just to set the stage. Like those are the issues that people run into. But anything to add?
Speaker 2 – 06:51
No, it all makes perfect sense. I just kind of had a thought just for the listeners out there. If you are a small to
medium sized business owner and you pass prematurely, what’s that like for your kids, for your heirs, for your
workers? Just a quick rundown.
Speaker 3 – 07:08
So I mean, that’s a really good question because if you have a spouse, let’s say one spouse is running the business,
the other spouse is working in something completely different or not working at all and prematurely passed by
default, they own the business or whatever percent you own goes to them. So I mean, that can be a huge problem
for a number of reasons. Number one, let’s say you’re 100% owner, spouse takes it over. He or she may have zero
idea what’s actually going on in the business. So now you have, you know, a spouse that’s mourning a death trying to
maintain a business. That’s a problem. Other problem is if you have any partners, let’s say me and you are partners.
I’m not married. So let’s pick on you and say we’re 50 partners in a business.
Speaker 3 – 07:50
You die and your wife now owns 50%. Very difcult for me. Now I’m like, well I’m working, trying to maintain this
business. I just lost my partner who’s responsible for a lot of revenue and a lot of the business and now I owe half of
the profts to his wife or spouse. That’s a huge problem. So yeah, without planning, I mean it’s just going to default
go to somebody or there could be like a for sale of there’s no plan and we have no option but to just sell this thing.
And you’re probably not getting a good, you know, a good valuation on in that scenario.
Speaker 2 – 08:20
Yep, yep.
Speaker 3 – 08:23
But yeah, good question. So let’s start again. Purpose of this podcast is what do you do if you want to give this to
children? So non fnancial tips then we’ll get into like the tactical nerdy fnancial planning stuff. But frst step. So I’m
thinking of one business owner that we did this successfully. Father started the business. When would this probably
been like 2010 in that time frame. Son was just out of college and he happened to. He didn’t start the business but
he was like one of the frst employees. So he was there from day one. So he worked in it for a long time. This was a
very successful transition. But my frst tip would be have your children work in the business as early as possible and
start them from the ground up. So don’t slot them in at some executive role.
Speaker 3 – 09:10
Make them do the heavy lifting at the bottom so that they understand everything that goes into the business and
then rotate them around through different departments so that they literally get experience doing every possible
thing that goes on in the business versus just trying to jump right to the top. Also important can be helpful to have
them gain experience outside of the business. I have a friend I’m thinking about. Father owns a business, son’s
taking it over. He made him go work for a year outside of it just to get corporate experience and just see what the
world’s like outside of that. Just so you’re not the only thing you know is you don’t. So the only thing you know is not
just that business. Expose the kids to key decisions, expose them into the decision making process. And key
relationships early on.
Speaker 3 – 09:53
The more familiar they are with clients and key relationships, the more likely and easier it will be for that transition to
be successful. And then if you are passing to kid to have clearly defned roles and job descriptions. So I think what
one thing that could just really derail this is if you have like a child coming in. I don’t really have a job description and
they’re just kind of like doing things. It’s important to set those boundaries. That could do a couple of things. One, I
don’t have clear tasks and two, it could upset the other employees that are, you know, have job descriptions, they
have goals are working towards and you just have someone that’s kind of just like free fown through the business. I
like this one. Have a, like a family business document so that you can review.
Speaker 3 – 10:42
So this would clearly defne what the business values are, the goals, the vision. Probably you know, refne this every
year.
Speaker 2 – 10:49
Is this shared publicly or with internally within the company or just within the family?
Speaker 3 – 10:53
I think it could be both. Okay, but I mean just like we do here, you know, we review our vision values, all that stuff. But
important to have those, have that documented and have those conversations with the children establish within that
document. So obviously values, vision, goals, established guidelines for how you resolve confict. So there’s all there.
I see this all the time where people that go into business like oh this is great, I love this person. Like this is going to
be awesome. It’s like no, you’re going to disagree on things, it’s going to happen, you’re going to hate each other at
some point.
Speaker 3 – 11:23
Let’s clearly defne, you know, what happens when there’s a disagreement and you can’t make a decision together
and then clarify how family members or any partners, specifcally family members because we’re talking about with
how they can enter and exit the business. So clear written out path of how they can get in and out, all that stuff can
help. But before we keep going on the other tips, anything, any thoughts?
Speaker 2 – 11:44
Yeah, just a question. So the idea of bringing in the children, having them rotate around, getting the experience
across the company, giving them well defned job roles generally speaking. How long does that take? I mean it’s not
going to be six months, it’s not going to be 20 years. Any thoughts there?
Speaker 3 – 11:59
I mean the example I’m thinking of that we did this successfully. I mean he worked probably, I think business started
2010, he started in 2011, 2012. So early on and then by the time he took the business over it was 2022 or 2023. I
mean it was like 10 years.
Speaker 2 – 12:15
So I mean it obviously depends on the, their skill set.
Speaker 3 – 12:19
I think the more experience, the better. Yeah, yeah, yeah, that’s a good question. So can you guys have open
communication and conversations about the business? So same thing when, you know, talk to the kids about what’s
going on and don’t just shield them from decisions and hard conversations. This is a big one actually. So how you
treat siblings that aren’t in the business. So let’s say one sibling’s taking over the business and the other one isn’t.
That sibling that’s taking over the business, depending what the other one does, could obviously have a much higher
net worth. So some strategies here is what we’ve done in the past is just an unequal split of other assets.
Speaker 3 – 13:00
So if one sibling’s taking over the business, they’re all of a sudden they have this big asset in the business and they
have a high income from the cash fow of the business. Maybe assets that the parents own outside of the business.
Maybe it’s like a 80, 20 split or 70, 30 or something that. Right. Sizes the other sibling just so there’s not a bunch of
animosity and resentment that one’s getting taken care of and the other one’s not. That’s a more detailed discussion,
but that’s just some high level thoughts and recommendations. Gradually transition the business over time and the
responsibilities so, you know, begin to give them more and more responsibility as they show the capability. And then
this is really important too. Have a clear plan for the day to day.
Speaker 3 – 13:45
If you are doing this transition while you’re living, whoever is the founder and running the business, like if they’re
selling the business or passing the business to a child. I’ve seen this so many times where like they don’t own it
anymore and then they’re showing up every day trying to be involved in decision making and that can just be a
nightmare. So have a job description and day to day responsibilities for whoever is getting out. Whether it’s they’re
the chairman now and they’re still just doing things from a high level. They’re fully retired, they have some
involvement that can really help create boundaries and let the transition be successful.
Speaker 2 – 14:21
Yeah, and not only that, maybe kind of as the founder, owner, transitions out of the business. Don’t just transition into
nothing, transition into something else so that you’re not showing up all the time. Right. Whether that’s starting
another business or philanthropy Or a hobby or travel or buy a house or build a house or something like that. So
they’re not just bored, for lack.
Speaker 3 – 14:42
Of a better term, showing up and trying to work. Yeah, that’s a good summary of the non fnancial tips. Anything to
add?
Speaker 2 – 14:49
No, I don’t think so.
Speaker 3 – 14:49
Into the fnances.
Speaker 2 – 14:50
Yeah.
Speaker 3 – 14:51
Okay, so now how you actually do this tactically there’s a lot of ways. Let’s use a real example here. I think that’ll give
some color to it. So let’s say we have parents, let’s say they’re worth, I don’t know, let me give me a number. 50, say
50.
Speaker 2 – 15:17
50 million.
Speaker 3 – 15:17
50 million total net worth. Let’s say the business is worth say 20 million. So we have a $20 million business
valuation. We have 30 million outside different assets, real estate, whatever it is. A couple of ways that this could
happen, then we’ll talk about the actual techniques and strategies. One, they could gift the business. If they gift the
business, they’re going to use their gifting exemption, which right now is $14 million person. So in this scenario, 20,
basically between the two spouses, they have 28 million. They gift it to them, transfer of ownership, they’re using up
their exemption. There’s no federal estate taxes because that’s under their estate exemption. The child, no, there
would be no step up in basis because step up in basis would be a death child inherits the business or gets the
business from a gift.
Speaker 3 – 16:16
There’s no purchase, there’s no real tax consequences. I’m thinking through this. Yeah, it’s a gift, so it is what it is.
Second way you could do it is purchase it. A million ways you can do this, which we’ll talk about, they could buy the
business outright over you know, an installment sale, meaning let’s say, you know, spread it out over fve years, you’re
paying a portion of the profts back. On that note, one thing that’s important for the valuation, you can discount these
valuations anywhere in the range of up to like 30, 40%. And the reason being if they’re not taking full control of the
business and depending on what the operating agreement says, you could, it can be for not being marketable and
not having control.
Speaker 3 – 16:59
So if you don’t have, if you’re a minority share owner, you can discount it because you’re not decision maker. If it’s not
marketable, it’s not, you can’t just go sell the shares to somebody else because if the operating agreement’s drafted
that way, so theoretically you could, they could discount that $20 million business, let’s say 30%. That gives them a 6
million dollar discount on the purchase. But these are big, the numbers and the valuation, again, industry specifc,
hard to agree on different strategies here. We can, we can get that higher or lower. But the problem really arises is
depending on the fnancial situation like this one, if they have, you know, $30 million outside of the business, they’re
probably fne that they’re gonna be okay. But a lot of times whoever’s selling is gonna want some value out of it.
Anything to add there?
Speaker 3 – 17:44
And then we talk about.
Speaker 2 – 17:45
No, just another question. Does, does the thought process change if the business is 90, even 100%, let’s say of
assets rather than the 20 of the 50.
Speaker 3 – 17:54
Yeah, because you know, if they just outright gifted and they have nothing else in their name, you fgure out how
they’re going to live. You know, they’re not gonna, if they give it, they’re entitled to, you know, if they have a zero
percent ownership, they’re entitled to no cash fow unless they’re an employee of the business. So yeah, there’s a lot
of variables here. You know, the frst thing is to make sure that the person getting out of the selling or gifting is
fnancially taken care of and they can maintain their lifestyle. Yep, yep, that’s a good question. So let’s talk about
tactically how to do this. So one way is a limited family partnership or family limited partnership. FLP is the name.
Speaker 3 – 18:37
So what this is, it’s basically you’re creating an entity where the parent is the general partner and the child is a limited
partner. And so what that does, you create 100 shares, for example, from day one, the parent owns 100 of them.
They transition the business to the kid, but they made 99%, they maintain 1% as the general partner. That general
partner still maintains all the decision, they still have all the decision making. So fnancially everything goes to the
kids but the general partner. And they could collect a salary out for being the general partner and then they control it
and still have business. So that’s a good strategy if the parent doesn’t want to give up control. But you know, there
may be estate planning considerations where we’re trying to use their exemption and do this tax efciently.
Speaker 3 – 19:27
But can be a strategy if the parent wants to stay involved. Another way, it’s a very similar structure would just be a
family llc. And what you do here, you do a similar thing where you create two share classes. So one share class is
basically like Controlling share class. And the other one is like fnancial. You delineate the two share classes. The
parent owns the one share class, child owns the other one. You can again transfer all of the fnancial value. And that
frst share class maintains control over everything. A little bit less complicated than the LLC or than the limited
family partnership. But those are two ways that you can, number one, just gift it all at once or gradually gift the
shares over time or sell them. You can do a sale too.
Speaker 3 – 20:10
Those are two ways if the parent still wants control. Anything, add or questions?
Speaker 2 – 20:14
No, no, keep going.
Speaker 3 – 20:17
Okay. And then a buy sell agreement is important. I mean that’s just basically documenting how before it happens,
how someone exits or enters, you know, just documenting what happens. But another way would be just an outright
sale. So let’s just do the math here. If this is a $20 million business valuation, let’s say, you know, you get a 7x
valuation on proft. So 3 million ish. So we’re doing 3 million a year in profts. We’re getting 7x for the valuation
equals 20 million. We could use a discount. Let’s say we discount at 30%. So now we have a 14 million dollar sale.
We’re selling 100% of it. A 14 million dollar note. Let’s say there’s ideally a lot of the way that these are structured is
20% goes down. So that would be 2.8 million. Let’s say the business has cash to do this.
Speaker 3 – 21:27
So 2.8 million goes out the door immediately, the 20% payment. So that leaves what’s 14 minus 2.8 to 11 2. So now I
have a note of $11,200,000. Say it’s a 5% interest rate over fve years. In this scenario they would be paying two and
a half million per year. And so if the business is only doing 3 million of profts, that’s probably not going to work
because it’s too tight a cash fow. So in this scenario, maybe you spread it out over 10 years and that leaves a $1.4
million payment times 10 years. So that’s one way to structure it. Profts 2 million. Owner keeps a million and a half.
Profts go to the parent of 1.4, you’re paying it over 10 years. So I mean there’s so many variables here. The cash fow
has to support it.
Speaker 3 – 22:27
The person taking the business owner doesn’t want taking the business over, doesn’t want to feel strapped like
they’re, you know, they have this debt hanging over them and they have to pay this off. But that would really be the
idea of an installment sale. You’re spreading it out, you’re allowing the business to cash fow it, and there’s a note
from the parent to the, to the child. From a tax standpoint, I’d say it’s very unlikely that anybody would buy this like in
one year. You just write a check for it. The business probably, you know, you can’t afford it. But if you spread out over
time, let’s say of that $14 million sale, we’d have to look at the books. But let’s say the basis. I can even get a rough
number here. I don’t know. Let’s say the basis is 4 million. There’s.
Speaker 3 – 23:10
That’s shooting from the hip. There’s a million variables there.
Speaker 2 – 23:15
Yeah.
Speaker 3 – 23:15
$4 million basis. Now there’s a $10 million capital gain that you’d be entitled to. Capital gains taxes 23.8 federally,
plus 3.5% if you’re in the state of Pennsylvania. If you sell it all at once on that $10 million gain, you know, you’re
going to be paying 2.6 million in taxes. If you spread it out over the installment sale, the term of the installment sale,
2.6 million in taxes divided by 10 would be about 260 a year in taxes. So you’re getting $1,400,000, $260,000 goes to
the IRS, you net 1.1 or whatever the math is. So that’s. Yeah. Essentially how the installment sale could work and
how the. But any thoughts there?
Speaker 2 – 23:55
Yeah. So in regards to taxes and just other. I know this is, you know, gets very complex very quickly, but going back
to the gifting versus the outright sale or the loan, any thoughts on who, what type of business or what situation is
better for which? I know it’s. It’s tough to say, but just generally.
Speaker 3 – 24:10
A tax standpoint touches tax gift, and there’s no payment accepted. I believe there’s no taxes. If you take a payment,
then it’s. There’s a capital gain tax. Yeah.
Speaker 2 – 24:20
I mean, just thinking from like a decision tree standpoint, you know, oh, I’m 65 years old, I want to sell. I want to pass
my business along to my kids. You know, there’s the gifting option, there’s a sale option. We’ll get to some of the
other options. But right off the bat, like, what are some boxes you want to check to decide which one might be worth
looking into more, you know?
Speaker 3 – 24:39
Yeah. I would say the frst Thing would be what is the seller? What do they need fnancially? You know, they got to be
able to live their life still. Second thing would be, I mean if you gift it can be hard because if a child just inherits a
business they didn’t work for, that isn’t always good. So there could be some tax benefts to do that. But the decision
is really like what, you know, is a child responsible enough and have the work ethic to maintain this thing? So I would
say those are really the variables. What does the seller need fnancially? What can the buyer fnancially afford? And
then more of the non fnancial stuff of like, can they actually take this over?
Speaker 3 – 25:20
And sometimes when you have a sale, there’s skin in the game that you’re like, okay, I have this note and I have to,
you know, I have to support this.
Speaker 2 – 25:27
Yep. Okay. Moving on to trusts, etc.
Speaker 3 – 25:31
Yeah. So trust. So you could also take the ownership, put it into an irrevocable trust. Again, gift income into play. If
you want to use your exemption or not, that could be a way that essentially the kids don’t own it outright. This would
depend on the age of the kids. And this could be a move. If you’re trying to save on estate taxes and use up this
exemption, but you don’t want to give the kids control. You could do like a family LLC or limited family partnership
and have the kids shares owned by a trust. And then that means that whatever the terms of the trust are determines,
you know, if they, when they take money out, they can take it out for us. That’s, that’s an option.
Speaker 3 – 26:11
One of the benefts of that, if you put it into a trust and then it sells or there’s any event down the road, if it’s a grantor
trust, which, an intentionally defective grantor trust would be a way to do this. The parent pays the taxes, which can
be a good thing because if that, if it goes in there and then it sells, if you put it in the trust and it sells, the anything
that’s a grantor trust fows back to the grantor’s tax return. So the parent could pay all those taxes if they have assets
elsewhere. And then that helps from an estate planning standpoint where the receiver of it doesn’t have to strike a
check for taxes.
Speaker 2 – 26:55
Yeah, I mean obviously there’s no one size fts all. One size fts all solution here. Depends on, depends on situation.
But obviously taxes is a major, major consideration in anything you do.
Speaker 3 – 27:04
Yeah. And I think that’s a good segue here. So one of the. Probably the biggest issue is say you have a $50 million
company, you haven’t done any of this and the owner dies and it goes to the kids. So again, the frst. Let’s assume
this is all of their assets. There’s nothing else. The frst 28 million is tax free. Now, the 22 million times 40% is what, 5
million, $5 million in taxes that are owed to the IRS. The problem is that’s an illiquid asset. So maybe there’s $5
million of cash in the bank account that could pay that. But it’s different than if you have a brokerage account and it
gets inherited and you owe inheritance tax or estate tax, you can just write a check from the brokerage account.
When you have an illiquid asset, that’s a problem.
Speaker 3 – 27:57
You would get a step up in basis in the business. It’s the basis would be from what you inherited on day one. But you
have to strike a check for the 40% on a federal level plus state taxes, which are dependent one way around that is
what’s called a Section 6166 election. And so if the business makes up more than 35% of your estate at death, you
can spread the taxes out over 14 years. So you don’t do it all at once. But all of this is a reason why you need to plan
proactively and fgure out how this is, you know, is going to come into play. And life insurance would be a way to pay
the tax.
Speaker 3 – 28:32
There’s different avenues that you could cover, you know, cover this, but just a lot of nuances and planning that
needs done to make sure this is done effectively.
Speaker 2 – 28:40
Yeah, I think. And not to, not to end it prematurely, but the idea is that just as cumbersome and as time consuming
as it might be, create a plan, it’s only going to beneft your children, et cetera, et cetera. So it might not be all that fun
and it might take up a lot of your time, but still, it’s well worth it. Especially if you have a business that is currently
over the exemption limit of 28 million.
Speaker 3 – 29:05
Yeah. And that exemption is going to drop and set sunset in 2026. I do think it’ll get extended for four years based on
administration, but most likely it’s going to be lower in the future. So all the more reason to do planning around this.
And there’s no real right or wrong answer. This is a tough subject. There’s a lot of gray area Very delicate. Probably
not going to get it right. Like it’s not going to be perfect, there’s going to be issues with it. But you know, goal is make
it as bulletproof as possible and do it efciently. From a non fnancial standpoint of how do we make sure this works
and then the other, you know, from a fnancial standpoint, doing it as tax efciently as possible.
Speaker 2 – 29:47
Yeah, maybe one last thing. So outside of obviously paying way more in taxes than you could have, or dealing with a
family issue where the example where the non working spouse has to take over the business, what are some other
obvious downsides where if you don’t set up, set this up in the right way, what can happen?
Speaker 3 – 30:08
I would say it’s hard for the business to sustain. One thing that actually I just thought about is key employees. So if
you have key employees that don’t have ownership and they all of a sudden the owner dies and someone’s taking it
over, I mean, they may not want to stay and the business could be reliant on, you know, these say there’s fve key
employees, the business needs them. If the owner’s not there, they might be like, screw this, I’m out, I’m gonna go
work somewhere else. So that’s an important part too, making sure that with the transition that you retain your key
people.
Speaker 2 – 30:36
Yep, yep. And that can be written in the documents, obviously. Okay, well, I think that’s, I think we covered everything.
Any other, any last thoughts or.
Speaker 3 – 30:45
No, I would say overall it’s just, it’s a complex topic. It’s very hard to get right. But if you know, if you’re intentional
about it and you take the time to do it can be, you know, as seamless as possible.
Speaker 1 – 30:58
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