As a family business founder in the third third of life, are you prepared to embrace succession planning?

A Little Story about Grandma at the Beach

One bright summer day a grandma took her toddler grandson to the beach. She was keeping a watchful eye on him as he played in the sand at the water’s edge when suddenly, seemingly from out of nowhere, a large wave crashed and receded, carrying her grandson out to sea.

She dashed frantically to the water’s edge but saw no sign of the boy. In desperation she raised her eyes to heaven and prayed, “O Lord, please send my grandson back to me!” Immediately a new wave washed in, depositing the tot at her feet. She plucked him up, looked him over, and was greatly relieved to see that he was unharmed.

She raised her eyes to heaven again and said, “Thank you, Lord! … Oh, and, uh, … he did have a little hat on him!”

Even after receiving so much, she had the audacity to ask for one thing more.

One Thing More

Do you, as the founder of a family business in the “third third” of life, empathize with the Lord in that story? Might the demands of this final season of life feel to you a little like the grandma requesting a hat? After all, you’ve already given so much! You have learned to recognize opportunity, been willing to take risks and make sacrifices when necessary in order to reap the rewards in time. You have started and grown a successful business. You have worked hard over many years to provide well for your family and enhance the quality of life for your customers, employees, and community.

And yet. … “Where’s the hat?”

“The hat,” in this case, is the need to proactively engage advisors and stakeholders to develop a thoughtful, comprehensive plan that positions the business – and your family – for the next generation. A plan that completes your work as a founder. A succession plan.

What Does a Succession Plan Include?

According to Andrew J. Sherman, “A well-developed plan will do the following:

• Maximize the present value of the net liquid capital that you’ll realize from the sale or transfer (thereby minimizing the tax consequences of the proposed transaction);
• Recognize that the future ownership and management team must be trained, mentored, and properly prepared well in advance of the actual transition; and
• Account for the impact on your employees, your family, and the surrounding community.” (Parting Company: Innovative Strategies to Plan for Succession, Manage the Transition, Sell or Transfer Your Business, Kiplinger, 1999 p. xxii)

Achieving all this is difficult and demanding work, both strategically and emotionally. We suggest breaking the tasks down into more manageable subgroups and allowing ample time in which to do it. The subgroups suggested by Laurie Barkman in her book The Business Transition Handbook (JWC Publishing, 2023) are helpful: Business Readiness, Financial Readiness, and Personal Readiness (p. 13). In response to the question, When should I start thinking about business transition planning in earnest? she replies, “Depending on your specific circumstances, it could be seven to ten years ahead of an intended transition.” (p. 9) If that ship has sailed in your case, better late than never. Shorter timelines can be made to work.

Engaging Founders on Succession is a Macroeconomic Priority

The State of Indiana recently launched the Keep IN initiative, “aimed at giving Indiana’s small and medium-sized business owners resources to plan for successful exits so operations can continue after they retire.” What is the reason for this?

There’s concern that our state’s version of the “Silver Tsunami” – the nation’s massive wave of baby boomer retirements – could result in job losses for younger Hoosiers. The Indianapolis Business Journal reports, “Nearly one-fifth of Indiana’s economic output comes from businesses owned by people over the age of 55, according to a recent analysis from the Indiana Business Research Center. Most of these business owners do not have a succession plan, said Brian Schutt, the inaugural director of Indiana’s Office of Entrepreneurship and Innovation. The impact from the wave of retirements … might be felt most acutely outside the state’s metropolitan areas. Small and medium-sized businesses account for much of the employment in rural parts of Indiana.” Half the business revenue in 88 of our 92 counties is associated with business owners 55 and over. (Indianapolis Business Journal, 05/15/26)

Behind every one of those statistics is a founder facing the same questions you are. And Indiana is not unique; family businesses across the heartland are facing the same challenge.

Profile of a Founder Ready for Succession

Family business advisors wryly observe that owners tend to be much better at getting into business than getting out. That’s not surprising, given the investment founders make in their businesses, and the way their identities become intertwined with the enterprise. So, what are some characteristics of a family business founder who is truly ready to embrace and follow through on a succession process? As you read through the list below, notice which of these feel natural and which feel like a stretch. That gap is where succession planning work typically begins.

• Recognizes that succession planning is a process, not an event
• Accepts the reality of mortality, aging, and eventual transition
• Understands that preserving the business may require surrendering personal control
• Desires continuity of the enterprise beyond their own leadership
• Values family harmony as well as business performance
• Is able to separate identity from role or title
• Demonstrates emotional readiness to let others lead
• Trusts that the next generation can grow through responsibility and experience
• Shows curiosity about the aspirations and capabilities of successors
• Is open to honest feedback from family members, advisors, and key employees
• Invites dialogue instead of demanding compliance
• Has enough financial security to contemplate stepping back
• Understands the difference between fairness and equality among heirs
• Is willing to address unresolved family tensions before transition
• Accepts that successors may lead differently
• Prioritizes stewardship over personal legacy or ego
• Thinks in generational rather than quarterly time horizons
• Is willing to document policies, governance structures, and decision-making processes
• Supports development opportunities for emerging leaders
• Delegates meaningful authority before retirement
• Allows successors to make decisions – and occasionally mistakes
• Is willing to discuss ownership separately from management roles
• Understands the tax, legal, and financial implications of transition planning
• Communicates intentions clearly and repeatedly
• Is willing to create timelines and accountability for the transition
• Recognizes that “someday” succession plans usually fail
• Understands that delaying transition can endanger both relationships and enterprise value
• Has interests, purpose, or identity beyond the business itself
• Wants the next generation to inherit not merely assets, but healthy relationships and shared purpose
• Seeks outside expertise rather than assuming the family can solve everything internally

How We Can Help

If you’re an aging founder still driving business operations, reviewing that list is a sobering experience. You may feel the existential dread associated with confronting your own mortality. You may have tried to imagine your life after leaving the business and drawn a blank. You may have gotten a knot in your stomach from worrying that your successor(s) will try to change the business before they really understand it. You may be feeling any or all of those things, and more. Succession is hard.

Barkman writes, “You built your business, but you haven’t done it by yourself. Likewise, when you’re starting to think about a transition journey, you’re not going to work on this by yourself.” (p. xiv) Succession is a team sport.

When you engage us for help with succession, our professional facilitation enables your family to define a shared mission that incentivizes persistence. We’ll work with you to identify the ultimate outcomes of your succession process, break them down into component milestone tasks, and create accountability for execution at a pace that is appropriate and sustainable. In essence, we create a secure, confidential holding environment within which the succession process can unfold.

Your Single Most Important Contribution

There is no perfect plan. Adjustments and mid-course corrections will likely be necessary. But a well-designed, clearly communicated, and consistently implemented succession plan can leave you financially secure in retirement while leaving the business sufficiently capitalized and under capable leadership. The business should be poised to enjoy a new season of growth and vitality post-succession. Preparing for and supporting the next chapter of family business operations is a crucial contribution – a parting gift to your heirs, customers, employees, and community that only you can make.

John L. Ward writes, “The succession plan should pave the way for the company’s revitalization. … it will be the successors’ job to foster the new business life cycle and develop the organization professionally. Specifically, the successor or successors will: (1) help develop the new strategy, (2) add formal management systems, and (3) build a new management team. … Under ideal conditions, successors will assume this responsibility with the full faith and support of the outgoing generation, who will have laid the groundwork for them. This is probably the single most important contribution that the outgoing generation can make as the family approaches the transition to new leadership.” (Keeping the Family Business Healthy: How to Plan for Continuing Growth, Profitability, and Family Leadership, Jossey-Bass, 1987 p. 186)

Conclusion

Congratulations on all you have accomplished! What you’ve done by creating and growing a successful family business is no mean feat. You are no doubt highly esteemed and appreciated, though you may not always feel it. Now to complete your entrepreneurial journey, consider doing one thing more: proactively engage advisors and stakeholders to develop a thoughtful, comprehensive plan that positions the business – and your family – for the next generation. A plan that completes your work as a founder.

A wave of retirements is upon us, even bigger than the one at Grandma’s beach. How you and other departing founders handle succession will shape the well-being of your families – and the economic vitality of a future you helped build, but won’t be here to see.