Succession Planning in St. Louis, MO

Complimentary financial planning By Savology

Succession planning in St. Louis, MO. Succession planning is an indispensable strategy for St. Louis, MO business owners striving to safeguard both their future and that of their business. Moreover, guaranteeing a smooth transition of leadership, effective succession planning can keep an organizations values and business goals aligned. Consequently, a well-thought-out succession plan requires a detailed assessment and consideration of a company's and business owner's finances, including business valuations, tax implications, and more.

Correct Capital is a financial advisory firm in St. Louis, MO that engages with business owners in their current stage so we can help you in getting where you want to go. As a fiduciary advisor, we are obligated to have your best interest at heart. If you're interested in developing or modifying a succession plan for your St. Louis, MO business, reach out to Correct Capital today at 314-930-401(k), contact us online, or schedule an appointment with one of our advisors.

Are you hesitant to meet with an advisor? Check out our process page online to see how simple it is to get started.


What Is Succession Planning?

Succession planning ensures that a company stays robust and maintains its direction, even during times of leadership transition, promoting a sustainable future for the business by preparing for inevitable changes.

Taking a preemptive approach allows you to mitigate risks, which can disturb strategic objectives. Effective succession planning is particularly vital for maintaining the continuity of family-owned businesses and small and medium companies, where the impact of a change in leadership can be significant.

By being proactive about developing a succession plan, businesses can ensure an easy transition of skills, knowledge, and values. It helps in minimizing disruptions, upholding stakeholder confidence, and safeguarding the legacy of the business. Moreover, it supports long-term business strategies, ensuring that the future leadership is equipped and able of guiding the company towards its growth and revenue goals.

Effective succession planning includes:

  • Identifying and developing individuals whose skills and vision align with the company's goals is critical, involving customized training and mentorship
  • A thoroughly developed timeline, detailing the phased transition of responsibilities and key milestones
  • Proficiently navigating challenges, such as family dynamics, strategic alignments, and financial consequences

Key Financial Elements of Effective Succession Planning for St. Louis, MO Business Owners

The financial elements of succession planning cannot be ignored as they significantly affect both the business owner and the business they're leaving behind. St. Louis, MO business owners need to consider how their succession planning impacts:

  • Business valuation
  • Tax implications
  • Funding the succession plan
  • Estate planning
  • Retirement planning
  • Risk management
  • Liquidity considerations
  • Debt and capital structure
  • Their employees

Each of these elements requires meticulous consideration. Business owners typically hire a team of professionals, including St. Louis, MO financial advisors, accountants, and attorneys, to tackle these aspects successfully and create a tailored, robust succession plan.

Common Strategies in Succession Planning for St. Louis, MO Businesses

Succession planning can be done in a variety of ways, depending on the nature and needs of the business. Here are some common types of succession plans that St. Louis, MO businesses may employ to ensure a smooth transition of leadership and ownership:


Employee Stock Ownership Plans (ESOPs)

ESOPs are a preferred method, especially for non-public companies. This strategy entails setting up a plan where employees are given shares of the company, typically as part of their retirement benefits. Over time, the incumbent owners can sell their shares to the ESOP, gradually transferring ownership to the employees. ESOPs are not only economically beneficial but also boost the morale and productivity of your highest performers.


Family Succession

For numerous family-owned businesses, passing the leadership and ownership to the next generation is a commonly adopted approach. This method entails managing family dynamics, thoroughly evaluating the competence of potential successors, and securing the long-term interests of the business are adequately preserved. Family succession calls for meticulous planning to adequately tackle both the personal and professional aspects of the transition.


Management Buyouts (MBOs)

In a management buyout, the company’s incumbent management team buys the business from the present owners. MBOs can be beneficial as the management already has a deep understanding of the business, which can result in a more seamless transition.


Mergers and Acquisitions (M&A)

Mergers and acquisitions can be a strategic approach to succession planning, notably for larger businesses. Merging with or integrating into another company can guarantee the longevity and growth of the business, though it necessitates thorough planning and negotiation.


Buy-Sell Agreements

Buy-sell agreements are essential in succession planning. They specify how a partner’s share of the business will be transferred in the event of their leaving, death, or incapacitation. These agreements, often backed by life insurance policies, help ensure a smooth transition and financial stability.


External Succession Options

In cases where the above plans are not viable, businesses may seek out external candidates. This involves recruiting experienced leaders from outside the organization who can bring innovative ideas and expertise.

Sometimes, the best succession plan might entail selling the business to a third party. This might involve another company, a competitor, or an investor. This strategy demands preparing the business for sale, which includes enhancing its value and making it appealing to potential buyers.


Contingency and Emergency Succession Planning

This strategy involves preparing for unforeseen events, such as the sudden loss of a key leader. It ensures that the business has a plan in place to promptly and successfully respond to such situations, limiting disruptions.

Each of these strategies has its own set of advantages and aspects. The choice hinges on various factors, including the size of the business in St. Louis, MO, its ownership structure, and the long-term goals of the current owners. A comprehensive evaluation with the help of financial advisors is vital to ascertain the most suitable succession planning strategy for your business and family.

How a Financial Advisor in St. Louis, MO Can Help Business Owners With Succession Planning

Working with experienced St. Louis, MO financial advisors like those at Correct Capital offers business owners reassurance that their succession plan is in compliance, optimized for tax purposes, and in good hands. A financial advisor can help your business's succession planning in St. Louis, MO by:

  • Developing a Comprehensive Succession Plan: Advisors can guide business owners by advising them to help them identify certain opportunities they can consider, such as familial succession or finding someone outside the business.
  • Navigating Tax Implications: Succession planning can involve significant tax planning; financial advisors advise you in structuring the succession to reduce tax liabilities for the sale.
  • Integrating with Estate Planning: For business owners, estate planning often coincides with succession planning; a financial advisor works with the business owner's attorney to integrate the business succession plan into the owner's personal estate plan, ensuring a smooth transition of ownership and realization of the owner's wishes.
  • Planning for Retirement: Business owners frequently depend on the sale or continued success of their business to fund retirement; financial advisors play a vital role in organizing how the owner can plan out their income in retirement.
  • Planning for Continuity: Financial advisors advocate for strategies, including insurance, to secure the business and its stakeholders in unexpected events like the death or disability of the owner.
  • Providing an Objective Perspective: Independent financial advisors offer an objective view on succession plans, helping make decisions based on what makes sense instead of emotions.
  • Giving Investment Advice Post-Sale: After the sale of the business, a financial advisor can offer guidance on investment strategies for the sale proceeds. We help clients choose the right investment vehicles that match their risk tolerance and future income needs.
  • Assisting with Implementation: Finally, financial advisors collaborate with your legal and tax professionals to ensure your succession plan is properly executed.
Succession Planning in St. Louis, MO | Financial Advisors | Retirement Planning Near Me

Call Correct Capital for Your Business Succession Planning in St. Louis, MO

Taking the first steps towards succession planning can be a notable milestone for any St. Louis business owner. Correct Capital simplifies this process, offering a straightforward path to begin and carry out a comprehensive succession plan that's specifically designed to your specific needs. Our process involves:

  • Initial Meeting: This is your chance to share your aspirations and considerations about the future of your business, your finances, and your retirement.
  • Current Financial Situation: We'll take a look your current financial situation. This will help us understand your individual needs and how to assist you get from where you are to where you want to go.
  • Strategy Consultation: After assessing your financial situation, we'll have a detailed strategy consultation. Here, we'll present the best financial strategies and options available to you for the sale or transition of your business.
  • Customized Plan: Once we've agreed upon the best course of action, we'll begin with implementing your personalized financial plan and succession plan. This includes overseeing the financial aspects of your transition and ensuring your retirement planning is on track.

Our approach is deeply rooted in our ethics, commitment, and neutral perspective. Whether you're considering retirement, looking to transfer your business to the next generation, or preparing for unforeseen circumstances, Correct Capital is here to assist. Call us today at 314-930-401(k) or contact us online to begin.

Are you ready to experience the Correct Capital difference?

GET STARTED

Meet our team of financial advisors.

Our Team

Services We Offer