Touchstone Advisors Welcomes Rishy Mehrotra as M&A Advisor for Greater Philadelphia Region
July 24, 2025
Beyond the Numbers: What Truly Drives Business Value
September 4, 2025There are over 30 million family-owned businesses in the United States—from household names like Wrigley and Marriott to your neighborhood grocery store. Yet despite their prevalence, fewer than one-third of these businesses successfully transition to the second generation.
Lack of Planning
One key reason for this sobering statistic is the lack of succession planning. Business owners often delay this crucial step—either because it feels emotionally difficult or because they are too focused on day-to-day operations. Some simply can’t envision the business without themselves at the helm.
But with baby boomers rapidly reaching retirement age, the time to plan is now. Unexpected events such as illness, disability, or even death can arise at any moment. A thoughtful succession plan is essential to ensuring the long-term survival of any business—especially those run by families.
Be Proactive
Don’t wait until retirement is on the horizon. Begin developing your succession plan as early as possible. Even if you expect to lead the business for many more years, life can throw surprises your way that accelerate the need for transition.
Build Your Team
Engage experienced professionals—such as attorneys, accountants, financial advisors, and M&A intermediaries—to guide the process. Their objective advice and technical expertise are invaluable in structuring a solid plan while you continue managing daily operations.
Succession planning should be a collaborative effort. Simply revealing a finalized plan to your family can lead to resentment or disagreement. Including family members in the discussion fosters transparency, goodwill, and long-term support for the transition.
Elevate Your Successor
Take the time to mentor and train your chosen successor. Whether it’s a family member or a trusted employee, they need to understand the full scope of running the business—not just the role they currently occupy. A well-prepared leader significantly increases the likelihood of a successful transition.
Explore All Options
Succession planning should address three key areas: management, ownership, and taxes. Remember, management and ownership can be separated. For example, one family member may be best suited to run the company, while ownership is divided among several heirs.
A comprehensive succession plan includes a financial strategy. Ensure the business is properly valued, and take steps to mitigate gift and estate taxes that could burden your heirs. Poor planning in this area can put both the business and your family’s financial future at risk.
It’s natural to want your eldest child to take over, but they may not be the right person for the job. Evaluate successors based on their capabilities, interest, and leadership skills. If a better candidate exists—whether inside or outside the family—make that tough but smart choice. In some cases, selling the business may be the best option, and a business intermediary can assist in identifying buyers and structuring the deal.
Don’t Wait—Plan Today
Succession planning is not just about the future of your business; it’s about protecting your legacy and securing your retirement. By starting the process now, you can help ensure a smooth transition, provide clarity for your family, and safeguard the value you’ve worked so hard to build. Touchstone Advisors is here to help. Contact us today and have a confidential conversation about your situation.
Our goal at Touchstone is to Maximize the Value of Our Client’s Life’s Work.
Steven Pappas, M&A MI
Partner, Managing Director
Touchstone Advisors
860-669-2246
spappas@touchstoneadvisors.com
