Business succession planning: 5 key resources
Business succession is a critical issue for businesses leaders and their stakeholders alike (e.g. employees, customers, suppliers, and local communities).
Research from the Minnesota Center for Employee Ownership (MNCEO) and Project Equity shows that roughly half of employer businesses in Minnesota have owners over the age of 55, reaching an age of likely ownership transition. Concerningly, however, an overwhelming majority of businesses (85%) do not have succession plans.
Similarly, an online survey conducted by the Minnesota Chamber’s Grow Minnesota! program in August 2021 revealed that nearly 1 in 5 businesses were planning to sell or transition ownership of their business within 5 years, but only 37% of those businesses have a succession plan in place.
This is a risk for the businesses and the communities that rely on their economic contributions in the form of jobs, local goods and services, tax revenues and civic engagement. In many cases, business owners simply don’t know where to start or to turn to for guidance on this issue.
Fortunately, there are resources available for business leaders to take proactive steps regarding their business’s future. Here are five resources that can help you start succession planning from Grow Minnesota!’s Business succession and transition resource directory:
In many cases, businesses require in-depth professional expertise from outside partners as they plan their business’s future. MN Supplier Match is an initiative of the Minnesota Chamber of Commerce's Grow Minnesota! program to help businesses more easily find those professional experts and partners.
Minnesota businesses can find local suppliers through a database of over 1,100 companies. Additionally, Grow Minnesota! staff provide direct assistance to identify and connect with Minnesota suppliers and service providers. Contact us at growminnesota@mnchamber.com for direct assistance.
- Services offered: Database of over 1,100 Minnesota suppliers; direct assistance to identify and connect with Minnesota suppliers/service providers, including business valuation and brokerage services, succession planning, etc.
- Area(s) of focus: Minnesota businesses of all sizes, regions, and industries.
- Fee/cost: No cost to search database; No cost for up to 2 hours of direct assistance – hourly rates apply beyond that.
- Eligibility: Must have physical business operations in Minnesota.
MNCEO educates business owners and their advisors (lawyers, bankers, accountants, wealth advisors) on the benefits of employee ownership (e.g. Employee Stock Ownership Plans (ESOPs), Worker-Owned Cooperatives, and Employee Ownership Trusts (EOTs)).
Businesses looking to explore employee-ownership models can receive helpful information and guidance here.
- Services offered: MNCEO provides assistance in navigating business transition through case studies, articles, webinars, videos and access to a list of service providers who can assist with employee ownership transitions.
- Area(s) of focus: Employee-ownership via Employee Stock Ownership Plans (ESOPs), Worker-Owned Cooperatives, and Employee Ownership Trusts (EOTs)
- Fee/cost: Free consultation
- Eligibility: None
Minnesota’s statewide network of Small Business Development Centers provide professional expertise on a wide range of business functions, including business valuation and succession planning. If you are a business owner looking for confidential assistance to navigate a future exit or ownership transition, the SBDC is a great first stop.
Because of the SBDC’s funding structure, businesses receive professional consulting services at no fee. Learn more on their website here.
- Services offered: One-on-one professional consulting services; workshops/trainings. Many SBDC consultants hold the “Certified Exit Planning Advisor – CEPA” designation from the Exit Planning Institute.
- Area(s) of focus: Consulting on a wide-range of business functions for small and medium-sized businesses, including business valuation and succession planning.
- Fee/cost? None
- Eligibility: Must meet SBA’s small business definition (generally under 500 employees).
Founded over 30 years ago, the St. Thomas Family Business Center plays an important role for family-owned businesses in Minnesota and surrounding regions. The center offers a variety of educational and peer-learning resources, including a popular breakfast series event where business leaders can find a safe place to tackle issues unique to family businesses.
- Services offered: Educational events, seminars, peer groups, advisory referrals
- Area(s) of focus: Closely-held family businesses
- Fee/cost? Yes; depends on services
- Eligibility: Depends on services; participants generally must be family-owned business leaders.
UMN Extension Community Economics team provides education, applied research and coaching to support community and economic development around the state. Their team has focused on rural business succession trends in recent years, and offers practical tools to help communities better support local business succession planning efforts. Now, they have co-created an online Business Succession & Transition Course for business owners with a private sector partner, Vision One High Performance Group. It launches March, 2022.
- Services offered: Research, information and support for local succession planning initiatives; education for business owners.
- Area(s) of focus: Online education for business owners; Rural communities
- Fee/cost? Free research findings; course fee $500
- Eligibility: No restrictions
Want to learn more?
You can also check out this recent MN Supplier Match webinar for practical tools on this topic.
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