What is your business succession strategy?

Wherever you are in your career, the time to begin business succession planning is now. Your business will eventually transition, and the key question is whether you will be prepared when that time comes. Given the labor, sacrifice and risk-taking involved in building a successful business, owners have high expectations for the rewards that will come when the business is passed down or sold. The value owners receive may help fund retirement, a new venture or other personal and financial goals.

A successful business transition can result in productive careers for the next generation, a charitable legacy in the community or all of the above. The reputation of the business, the goodwill you've built, your passion projects and the workers and families who depend on the company could all suffer if the transition is not handled carefully.

According to the Huntington Bank 2026 Beyond Business Report, 54% of businesses anticipate an ownership change by 2030, yet only 45% of business owners have a formal succession plan in place¹. Limited or no business succession planning can impact everyone involved, and if you sell to an outside buyer, the payoff could be far less than you anticipated because of poor planning.

A hasty or ill-considered transition could leave a business with less liquidity than it needs to operate or leave it with outsized debts that give creditors too much influence over the company’s future. The child you had hoped would take over may have different plans in mind or the business might end up being run by family members unprepared for the role.

Why should business succession planning start early?

We don’t know what will happen tomorrow, which is why succession planning should begin as early as possible. Demographics show that for many, there’s little time to waste. More than half of businesses anticipate an ownership change by 2030, with retirement cited as the primary reason for a future sale or transfer¹.

For many owners, there just never seems to be enough time amid daily pressures to focus on planning for this personal and professional evolution. Add another challenge: transition and succession planning often involve sensitive topics that even experienced business owners may find difficult to discuss. Given the stakes, the succession planning process should begin several years in advance of an owner’s departure. Though your succession goals may evolve as your business and family change and grow, laying a foundation can make that ultimate transition smoother.

Beginning early and involving experienced professionals can help owners preserve flexibility as circumstances evolve.

Business valuation: what's your company really worth?

Having a clear understanding of the value of your business is vital, not just when selling to a third party. An objective business valuation may also challenge an owner’s assumptions. You’ll also need to understand the value when planning your estate, considering a merger or preparing for another major life event such as divorce.

Long before you exit the company, a proper valuation can be a valuable business-planning tool, yet studies suggest that too many owners rely on guesswork.

Owners may think they have a good idea of what their company is worth, but its value is only what someone else is willing to pay. Without accurate valuation, owners may develop outsized expectations. Conversely, they might underestimate what their company is worth, potentially costing them a sizeable amount in a sale or creating tension within the family.

One example involved an owner who gave his grandson what he believed was a modest 5% interest in the company, only to learn through a subsequent valuation, the first in decades, that the interest was worth millions.

Not only did it greatly complicate the owner’s gift taxes, but it also backfired from an emotional standpoint. When other family members objected, the grandson came to resent the well-meaning gift and even considered leaving the company.

Specialists such as accountants, tax professionals and other advisors can bring a more objective perspective to the process and provide updated guidance as market conditions change. The more accurate your valuation is, the more intentional you can be about whatever your next step is.

How liquidity can affect a business transition

Even for companies with considerable assets and loyal customers, lack of liquidity can prevent a seamless transition and handing the business down within the family presents other issues. If the business is worth $60 million, coming up with the cash to buy you out may be a lot harder for your kids in their 30s than it would be for a third-party buyer.

A cash-flow crisis could threaten the business. Depending on the circumstances, transferring interests in the business over time through trusts or outright gifts of voting and nonvoting shares may help reduce the next generation’s financial burden.

Liquidity concerns could also threaten the next generation’s ability to keep the business going. If you’ve been relying on a $2 million line of credit, you can’t assume that your heirs will automatically have access to that same level of funding.

With some businesses, that line of credit is essential to keeping the doors open. If you haven’t thought through these issues, you could be handing down a significant financial challenge. Now may be the time for a careful review of your company’s overall approach to liquidity management, including operating accounts, working capital and strategic cash.

Extracting value: what will you walk away with?

When the time comes to ensure your own financial future, how much money can or should you take from the business? The answer requires careful consideration of a host of interlocking and, potentially, competing priorities.

Think about your own future. You may be considering retirement, a business venture or a different lifestyle. Owners may also want to protect and grow wealth for their family’s future.

Preserving wealth across multiple generations can be challenging, which is why estate planning strategies are often incorporated into a broader succession plan.

Another consideration is whether the company can remain financially healthy after the owner’s liquidity needs are met. Because business conditions often fluctuate from year to year, extracting a bountiful payment during a strong year could leave the company too lean to function when the next downturn hits.

Having a clear understanding of the value of your business is important, particularly when preparing for a sale or transfer. Thirty-seven percent of business owners cited maximizing valuation as their top concern in Huntington’s 2026 Beyond Business Report¹. Relying on an overly optimistic or unsupported valuation can create unrealistic expectations, strain negotiations and contribute to deal breakdowns. Working with a qualified valuation professional can help provide an objective, defensible assessment.

How a failed transition can affect employees and communities

If a business is shuttered because the owner neglects to prepare for its succession, more than just the immediate family may suffer the consequences. The impact may extend beyond the owner’s family to employees, customers and the broader community. Small businesses may support community sports teams, school programs and nonprofit organizations while providing local employment.

The closing of a business may reduce:

• Local employment opportunities
• Revenue that supports community services and improvements
• Support for schools, nonprofit organizations and community programs
• Opportunities for entrepreneurship and economic independence
• Local partnerships that contribute to a thriving community

How to start a business succession conversation

As daunting as questions about your exit from the company may seem now, the path to having a clear succession plan can start with the considerations we’ve outlined here. When you’re ready to learn more about key decisions and strategies such as keeping the business in the family or selling to an outside buyer, talk with your Huntington team about other available resources.

While it’s true that there’s a lot to consider, the process doesn’t have to be onerous. A Huntington wealth advisor can walk you through each step, introduce you to experienced associates and resources, and help you consider the available options.

One example involved business owners in their 50s who began succession planning early. Knowing their children were pursuing other careers helped them prepare for an orderly transition and eventual sale of the business.

When the husband died unexpectedly, those years of careful succession planning allowed the sale to proceed as planned, helping the family avoid a potential financial crisis during an already difficult time.