7-Step Business Succession Planning

What Is Business Succession Planning?

Business succession planning is the process of preparing for the future transfer of your business, ensuring a smooth transition when you decide to step away, retire, or if unexpected circumstances arise. It involves identifying potential successors, structuring the transfer of ownership, and addressing financial, legal, and tax considerations. A well-crafted plan protects your business’s stability and ensures continuity for employees, customers, and stakeholders.

Without a clear succession plan, your business could face uncertainty, disputes, or financial hardship. By taking a proactive approach, you can secure your legacy, minimize disruptions, and create a seamless transition that aligns with your long-term goals.

The Importance of Succession Planning

Effective business succession planning is essential to ensuring the long-term stability and success of your company. Without a clear plan, ownership transitions can lead to legal disputes, financial instability, or even the loss of the business itself.

A well-structured succession plan helps:

Protect your legacy – Ensures your business continues to operate according to your vision and values.
Minimize disruptions – Prevents operational setbacks that could arise from unexpected leadership changes.
Reduce tax burdens – Proper planning can help lower estate and transfer taxes, preserving more wealth for your family or successors.
Provide financial security – Guarantees a structured transition that benefits you, your heirs, and key employees.

By planning ahead, you maintain control over your business’s future and create a clear path for long-term success.

The Benefits of Strategic Succession Planning

A strategic succession plan does more than simply transfer ownership—it safeguards the future of your business, protects your employees, and preserves your financial interests. Without a structured approach, companies often face leadership voids, operational disruptions, and legal challenges.

By developing a clear, forward-thinking plan, you can:

Ensure business continuity – A structured transition keeps operations running smoothly, reducing uncertainty for employees, customers, and stakeholders.
Maximize financial efficiency. Proper planning helps reduce estate taxes, capital gains taxes, and other financial burdens, preserving one’s hard-earned wealth.
Empower your successors – Providing training and leadership development ensures your chosen successor is fully prepared to take over.
Strengthen business value – A well-managed transition enhances your company’s stability, making it more attractive to investors or potential buyers.

Taking a proactive approach to succession planning gives you peace of mind, knowing that your business will continue to thrive long after you leave.

Business succession planning for small businesses

7-Step Business Succession Process

At Borakove Osman LLC, we believe that working with a law firm should be a reliable and transparent experience. We know how important it is to keep costs manageable while ensuring efficiency and accountability throughout the process.

That’s why we use a 7-step business succession process—a structured approach that breaks down each phase into clear, actionable steps. These serve as checkpoints to keep expectations aligned and ensure a smooth, predictable transition.

Preliminary: Establishing the Framework

Successful business succession planning starts with a strong foundation. At Borakove Osman LLC, we guide Wisconsin business owners through the initial steps to ensure a seamless transition. Establishing the framework involves assessing your business’s current structure, identifying key stakeholders, and defining long-term goals.

Key considerations in this stage include:

Ownership and leadership evaluation – Who are the potential successors? Will ownership stay within the family, be transferred to key employees, or involve an outside buyer?
Business valuation – Understanding the worth of your business is crucial for structuring a fair and financially sound transition.
Legal and tax implications – Reviewing how ownership transfers will affect estate taxes, liabilities, and corporate structure.

By laying a clear foundation, you can create a roadmap that aligns with your business’s future. Borakove Osman LLC helps you navigate this crucial first step with precision, ensuring your business succession plan sets the stage for long-term success.

Design: Outlining the Succession Plan

Once the foundation is in place, it’s time to design the structure of your business succession plan. This phase involves selecting successors, determining transition timelines, and outlining financial strategies. Borakove Osman LLC works closely with Wisconsin business owners to create a clear, actionable blueprint.

Key elements of the design phase include:

Identifying successors – Whether passing the business to family or employees or selling to an outside party, this choice impacts the entire transition.
Financial structuring – Developing buy-sell agreements, funding mechanisms (such as life insurance or installment sales), and addressing debt obligations.
Operational continuity – Planning leadership development, training, and gradual transitions to maintain business stability.

A well-structured succession plan minimizes disruptions and ensures a seamless transition when the time comes. Our firm helps you design a strategy that reflects your business’s values, growth goals, and financial realities.

Draft: Detailing the Plan

With a straightforward design in place, we move to the drafting phase, where every detail is documented in a legally sound plan. At Borakove Osman LLC, we ensure your Wisconsin business succession plan is comprehensive and enforceable.

This stage involves:

Formalizing legal agreements – Drafting buy-sell agreements, shareholder agreements, and other essential legal documents.
Addressing financial arrangements – Setting up funding mechanisms, establishing trusts, and planning tax-efficient transfers.
Contingency planning – Accounting for unexpected events, such as sudden incapacity or market fluctuations, to ensure business stability.

A well-drafted plan reduces uncertainties and protects your business interests. Our attorneys provide meticulous attention to detail, ensuring your succession plan is both flexible and enforceable.

Testing: Evaluating the Plan’s Viability

A business succession plan is only as strong as its ability to work in real-world scenarios. At Borakove Osman LLC, we help Wisconsin business owners stress-test their plans to identify weaknesses before they become problems.

This phase includes:

Simulating transition scenarios – Running hypothetical situations, such as a sudden leadership change, to evaluate preparedness.
Reviewing financial models – Ensuring funding sources, buyouts, and estate planning mechanisms function as intended.
Gathering stakeholder feedback – Consulting key employees, family members, and advisors to refine the plan.

By thoroughly evaluating the viability of your plan, we help you adjust strategies as needed, ensuring a smooth and effective transition when the time comes.

Implementation: Putting the Plan into Action

The next step after testing and refining a succession plan is implementing it. Borakove Osman LLC supports Wisconsin business owners in implementing their plans, ensuring a seamless transition for leadership and ownership.

Key implementation steps include:

Executing legal agreements – Transferring ownership rights, updating corporate documents, and finalizing financial arrangements.
Leadership transition – Phasing in successors, providing mentorship, and ensuring operational stability.
Communicating with stakeholders – Keeping employees, clients, and partners informed to maintain business confidence.

Proper execution of a succession plan ensures your business continues to thrive without disruption. Our team guides you through each step, making the transition as smooth as possible.

Continuation: Ensuring Ongoing Success

Business succession is not a one-time event—it’s a continuous process. Once the transition is underway, ongoing adjustments may be needed. At Borakove Osman LLC, we help Wisconsin businesses ensure their succession plans remain relevant and effective over time.

This phase includes:

Monitoring successor performance – Ensuring leadership is successfully adapting to their new role.
Adjusting financial strategies – Reviewing tax planning, investment strategies, and business valuation post-transition.
Updating the plan as needed – Adapting to economic changes, legal updates, or shifts in business goals.

A successful succession plan requires long-term oversight. We remain committed to ensuring your business transition is not just completed but sustained for future success.

Completion: Finalizing the Transition

The final stage of business succession planning marks the official transfer of leadership and ownership. Our team ensures all legal and financial details are properly settled.

Key completion steps include:

Finalizing asset transfers – Ensuring all business interests are legally reassigned.
Confirming leadership succession – Ensuring the new owners and executives have full authority and resources.
Closing financial obligations – Settling outstanding buy-sell agreements, estate planning provisions, and tax considerations.

With the proper planning, your business transition can be smooth, legally sound, and financially secure. Our firm helps you finalize every detail, ensuring your business and legacy remain strong for generations to come.

Key Challenges and Risks in Family Business Succession

Family business succession comes with unique challenges that can complicate the transition. Without careful planning, these obstacles can lead to conflicts, financial strain, or even the loss of the business. Common challenges include:

Family Dynamics: Founders may be hesitant to step back, and discussions about succession can create emotional tensions or conflicts among relatives. Disagreements over leadership roles or ownership can further complicate the process.
Lack of a Qualified or Willing Successor: Not all next-generation family members have the desire, skills, or readiness to take over. In some cases, there may be no clear successor at all.
Balancing Family Interests: Some family members actively participate in the business, while others do not. Unequal treatment in ownership or management roles can create resentment and disputes.
Financial Pressures: Estate taxes, business debt, and liquidity issues can put the company at risk. Without proper planning, a large tax bill could force a sale of the business or create financial burdens for the next generation.

Addressing these challenges early through strategic planning, clear communication, and legal and financial safeguards can help ensure a smooth transition.

Strategies for a Smooth Transition

Implementing strategic succession planning measures is essential to facilitating a seamless handover of the business. These strategies help ensure stability, mitigate conflicts, and preserve the business’s value for future generations.

Buy-Sell Agreements

A buy-sell agreement establishes how an owner’s share is handled in the event of departure, disability, or death. It ensures ownership remains within the intended parties, preventing unintended third-party inheritances. This agreement also:

Sets a fair valuation to avoid disputes.
It is often funded by life insurance to provide liquidity for buyouts.

Trusts for Business Succession

Trusts offer structured asset transfer and control over business ownership. Key benefits include:

Allowing business interests to pass directly to chosen beneficiaries without court delays.
Setting conditions on ownership or management transitions.
Minimizing estate taxes by shifting future appreciation out of the taxable estate.

Tax Planning Measures

Effective succession plans incorporate financial strategies to minimize tax burdens and ensure liquidity. These may include:

Gradual transfer of ownership through gifts or share sales to reduce the taxable estate.
Leveraging available exemptions to optimize tax efficiency.
Maintaining sufficient cash reserves or using life insurance to cover estate taxes and buyouts, preventing forced business sales.

Implementing these strategies helps business owners secure a smooth transition, reduce financial strain, and maintain the integrity of their enterprise for future stakeholders.

Why Choose Borakove Osman LLC for Your Business Succession Planning?

At Borakove Osman LLC, we take a comprehensive, hands-on approach to business succession planning. We don’t just draft documents—we guide you through every step, ensuring a seamless and strategic transition for your business. When you work with us, you receive full-service legal support, including:

Thorough document review and analysis – We evaluate your existing business agreements, bylaws, and buy-sell agreements, explaining how they impact your current ownership and future succession plan.
Tailored legal guidance – We outline your options, discuss advantages and disadvantages, and help you choose the best succession strategy for your business.
Regular strategy meetings – Quarterly in-person meetings with you, our attorneys, and key stakeholders, plus additional meetings as needed to keep your plan on track.
Ongoing communication – Monthly or as-needed phone conferences with you and your professional advisors to address concerns and adjust the plan as necessary.
Custom plan design: We will work with you to create a detailed succession plan, including presentations to potential buyers and stakeholders.
Drafting and executing essential documents – We handle all legal paperwork, including purchase agreements, operating agreements, employment contracts, incentive plans, and financing documents.
Financial planning and valuation support – We review your financials annually, project company valuations, and coordinate with CPAs to assess tax implications.
Testing and refining your plan – Before implementation, we test all plan elements to ensure a smooth transition with no surprises.
Final execution and long-term support – Once the transition is complete, we deliver a final business succession binder, ensuring your business’s future remains secure and stable.

With Borakove Osman LLC, you gain a dedicated partner committed to protecting your business and legacy.

Contact Our Madison & Dane County Business Succession Planning Lawyers

Planning your business’s future is one of the most important steps you can take to protect your legacy, employees, and financial interests. A well-structured succession plan ensures a smooth transition, minimizes risk, and provides long-term stability for your business.

At Borakove Osman LLC, we are committed to guiding Wisconsin business owners through every stage of the process, from strategy and documentation to execution and beyond. Take control of your business’s future today. Contact us now to schedule a consultation.