By: Jordan Gerheim, CEO – Outside Chief Legal LLC
What Business Succession Planning Really Is
Business succession planning is a plan for what happens to your company when you step back, sell, become disabled, or pass away. It answers who will own it, who will run it, and how money, control, and risk will be handled.
Without that plan, the answers show up in a hurry, often driven by courts, family pressure, taxes, and buyer demands instead of your goals. For a growing business, that can be a real threat to your family, your team, and the value you spent years building.
Why Succession Planning Matters Before You Feel “Done”
Many owners think succession is a retirement topic. In reality, it is a growth and protection topic.
You do not know exactly when a health issue, family change, market shift, or an attractive buyer will show up. If your plan only exists in your head, your business is more vulnerable than it looks. A basic succession plan makes your business more stable for:
- Your family, who may depend on your income or sale proceeds.
- Your key team, who want clarity about their future.
- Your customers and lenders, who care about continuity.
- You, so you can say “yes” or “no” to opportunities from a position of clarity.
Good succession planning is simply running your company as if someone else may need to step into your shoes.
The Core Pieces of a Succession Plan
You do not have to cover everything at once, but you do need to understand the main moving parts.
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Ownership: Who Will Own the Business?
Decide who you realistically see owning the company in the future:
- A family member or several family members.
- Current partners or key employees.
- An outside buyer or competitor.
- A mix of the above, with partial sales over time.
This choice affects your legal documents, tax planning, and how you structure your buy‑sell or shareholder agreements.
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Management: Who Will Run the Business?
Ownership and day‑to‑day management are not the same. A clear plan answers:
- Who will lead operations if you cannot.
- How decisions will be made if there are multiple owners.
- What training or mentoring is needed now so someone is ready later.
This is where you move from “I know everything in my head” to “other people can run this with clear authority.”
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Money: How Value and Cash Will Change Hands
Succession plans should outline:
- How your ownership interest will be valued.
- How a buyout or sale will be funded (cash, installments, insurance, loans).
- How much money your family actually needs from the business or sale.
If this step is fuzzy, the people involved may agree in principle on succession but still end up in a bitter fight over numbers.
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Documents: What Puts the Plan in Writing
Your succession plan usually shows up across several documents:
- Operating, shareholder, or partnership agreements.
- Buy‑sell agreements.
- Employment and incentive agreements for key leaders.
- Wills, trusts, and estate planning documents.
Outside Chief Legal often works with tax and estate advisors so these pieces match instead of pulling in different directions.
A Simple Example: “My Kids Will Just Take Over”
Imagine an owner who assumes his two adult children will “just take over” the company someday. There is no written plan, no clear roles, and no buy‑sell or ownership roadmap.
When he has a health issue, both children step in with different ideas. One wants to grow and reinvest. The other wants more cash out and less risk. Without clear documents and decision rules, every choice turns into a fight. Key employees see the conflict and start looking for other jobs.
A better approach would have been to decide, years earlier, how ownership would be divided, who would have day‑to‑day authority, how disputes would be resolved, and what buyout options existed if one child wanted out. That plan could then be built into the company’s legal and estate documents.
How Outside Chief Leg al Fits In
For many growing businesses, the challenge is not writing a single “succession planning” document. The challenge is getting owner agreements, contracts, employment terms, and estate planning to work together. Outside Chief Legal helps owners build a personalized succession and exit framework that lines up with their goals, their family situation, and their financial picture.
We often serve as subscription-based fractional or outside general counsel for companies that want prevention-focused support across contracts, compliance, employment, and disputes, instead of only calling for help after trouble has started.
A Business Succession “Checkup”
You do not need to start with a full-blown succession plan. You can begin with a simple checkup.
Outside Chief Legal often leads a structured review of your ownership structure, key contracts, leadership bench, and existing estate planning to identify common blind spots and prioritize fixes. The result is a clear list of next steps, organized by timing and impact, so you can work the plan instead of feeling stuck.
Do This Next: Quick Succession Planning Checklist
Here is a straightforward list you can work through right away:
- Write down who you realistically see owning your business in 5 to 15 years (family, team, buyer, or a mix).
- List your current owners and their percentages, including any informal promises you have made about future ownership.
- Identify two or three people who could step into key leadership roles if you were out for six months.
- Check whether you have a buy‑sell, shareholder, or operating agreement that clearly addresses death, disability, retirement, and voluntary exits.
- Review any life insurance or disability coverage connected to the business and ask whether amounts and beneficiaries still make sense.
- Note any children, family members, or key employees who are “assumed” successors but have never had a direct conversation about it.
- Talk with your CPA about how different exit paths might affect taxes for you and your heirs.
- Schedule time with legal counsel to look at succession and exit as a business project, not just as part of your will.
Working through this list will show you where your plan is clear and where it is only living in your head.
Our Corporate/Business Counsel Services
Outside Chief Legal LLC is a modern, forward-thinking law firm serving as fractional chief legal officers and outside general counsel for businesses and their owners. With over 200 years of combined litigation, in-house, general counsel, and administrative legal experience, the firm delivers approachable, comprehensive counsel that blends legal expertise with practical business insight to help clients navigate ownership complexities with confidence. OCL is a trusted partner for founders, business owners, and leadership teams nationwide. Learn more about our firm, meet our team, or schedule a Risk-Free Strategy Session to talk with an attorney about how we can help your company.
