Is It Ever Too Early? The Right Time for Charlotte Business Owners to Start Succession Planning

Running a successful business in Charlotte demands your full attention. From managing daily operations and navigating market shifts to leading your team, it’s easy for long-term goals like “succession planning” to get pushed to the “someday” list.

You might think, “I’m years away from retiring,” or “My business is my plan right now.” But here’s a question we hear often at Portus Wealth Advisors: Is it possible to start thinking about succession too early?

The short answer, for most Charlotte business owners, is a resounding no. Waiting until you’re ready to exit is often too late. Succession planning isn’t a single event you check off a list; it’s a strategic process that requires time, thoughtful preparation, and often, significant adjustments to your business and personal financial plans. Delaying can lead to stress, missed opportunities, reduced business value, and outcomes that don’t align with your vision for the future.

The Danger of the “Someday” Mindset

It’s understandable why succession planning gets postponed. It forces you to confront complex questions about your future, your legacy, and potentially stepping away from the business you’ve poured your life into. However, putting it off creates significant risks:

• Unexpected Events: Life is unpredictable. Health issues, changes in the market, or an unsolicited (but attractive) offer can force your hand before you’re prepared.
• Lost Value: A rushed exit or transition rarely captures the full potential value of your business. Key value drivers often take years to implement and mature.
• Limited Options: Starting late drastically narrows your choices. The ideal successor (family, management, or third-party buyer) might not be ready or available on a compressed timeline.
• Family & Partner Conflict: Without a clear, well-communicated plan, transitions (especially within families or partnerships) can become fraught with misunderstanding and disagreement.

Why Starting Succession Planning Early is a Strategic Advantage for Charlotte Businesses

Think of succession planning less as an “end game” and more as ongoing strategic planning for your business’s future and your personal financial security.

Starting early provides the groundwork for that planning to begin, which sets in motion:

• Maximize Business Value: Early planning gives you the runway to implement strategies that make your business more attractive and valuable. This could involve strengthening management teams, diversifying customer bases, improving financial reporting, optimizing operations, or developing clear growth strategies – precisely the things buyers or successors look for, as highlighted by investment experts like Jay Bradley of GEM, a guest on our Charting Opportunities series.
• Identify and Develop Successors: Whether grooming a family member, empowering a management team for a buyout (MBO), or positioning the company for an optimal third-party sale, finding and preparing the right leadership takes considerable time.
• Align Business & Personal Goals: What do you want your life to look like after you transition away from daily operations? Early planning allows you to integrate your personal financial goals (retirement income, estate planning, philanthropy) with the business succession strategy, ensuring the outcome supports your desired lifestyle.
• Navigate Complexity Smoothly: Succession involves intricate legal, tax, financial, and emotional components. Starting early allows you and your advisory team to address these thoughtfully, rather than making hasty decisions under pressure.
• Increase Flexibility: The business landscape in Charlotte is dynamic. Starting the planning process early gives you the flexibility to adapt your strategy as your goals, your business, or market conditions change.

So, When Should You Really Start?

There isn’t a magic age or revenue number. Instead, consider these indicators:

• Timeline: How many years do you realistically need to prepare the business and your successor(s)? Most experts recommend starting the active planning process 5-10 years before your target transition date.
• Initial Thoughts: However, the initial thinking and conversations should begin even earlier, perhaps 10-15 years out. This involves defining your preliminary goals and understanding the potential pathways.
• Business Milestones: Significant events like bringing on key non-family managers, considering major expansion, taking on substantial debt, or achieving a certain level of stability are all good triggers to begin formalizing your thoughts.
• Personal Goals: As you start seriously contemplating your long-term personal financial independence and retirement vision, succession planning should become a parallel track.

Succession planning is a journey, not a destination.

Starting early means initiating the conversation, defining your vision, and taking the first steps, like understanding your business’s current value and identifying potential gaps.

Don’t Wait for “Someday”

For Charlotte business owners, proactive succession planning isn’t just good practice; it’s essential for securing your financial future and the legacy of the business you’ve built. It ensures you remain in control of the process, rather than reacting to circumstances.

Ready to move succession planning off the “someday” list?

The first step can be as simple as a conversation. Contact us today to get your plan established.

Call Us: 704-936-0086