The Dos and Don’ts of Succession Planning

Originally published on Inc.com, 15 September 2025.

Anyone who’s watched all four seasons of HBO’s Succession knows that it can be incredibly complicated—both logistically and emotionally—to pass along control of a company once the owner ages out.

Even still, it’s an important process that many founders must one day confront. The decision of who to hand the reins over to could shape their legacy, and their family’s financial situation, for generations to come, so it’s not the sort of thing to be deciding at the last minute.

Ben Francois, managing partner at the family business advisory firm BanyanGlobal, recently co-authored a piece in the Harvard Business Review exploring the different options available to founders who are departing their company, from entrusting it to family members, employees or investors to restructuring it as a co-op, charity or public company.

Francois recently spoke with Inc. about what small business owners should be doing to set the stage for their own succession—even if they’re not planning to retire for many, many years. 

Why is succession such a hard decision for founders, practically as well as emotionally, and how have you seen them wrangling with such a pivotal decision?

The reason it’s hard is that no one’s ever been in that position before, so even in a family business, you’re only the senior generation once; you’re only the junior generation once. And when you’re that senior generation, you may or may not have a model of what succession looks like, but you’re really figuring it out on the fly. And as a founder in particular, it’s a very lonely spot, so you don’t really have anyone to talk to about it, and you’re really trying to figure something out that has implications that are pretty far down the road. What you’re focused on is your business. There’s a big part of founders that really identify as a founder, and so thinking about a life where that is no longer true is a real challenge.

How do you see founders wrangling with that?

There’s two main pathways. There’s the group that is really clear on where they want to go–whether that’s a family business or a transition into a nonprofit similar to the Patagonia model—and when you have that clarity, you’ve worked through the emotions. You’ve worked through what you want your legacy to be. The other group, frankly, ignores it, and it just doesn’t come up. I think there’s a belief that they’re keeping their options open, but I think what really is happening is, when you’re not thinking about it, it becomes really challenging to plot a course to what you want.

What are some of the mistakes you see founders make when they’re going through this process?

If you don’t plan well, what happens is you’ve limited your choices. The choice will be made, whether you make it or you don’t. So this is like a Charlie Munger inversion problem: ‘If I don’t want to have a successful outcome, what would I do?’ You would say, ‘I’m going to not make any decisions, and at the end, whatever the path of least resistance is for my heirs—or whoever’s going to get this business—is what’s going to happen.’ So the big mistake is that lack of intentionality.

The inverse of that question is, what can founders do years ahead of time—when they’re not actively thinking about succession—to set themselves up for a successful transition down the line?

What I see work out in the wild is really thinking through those legacy questions of what you want, and revisiting them on a fairly frequent basis. The reality is, what you want when you’re 40 might look really different when you’re 60 and you have grandkids. Your perspective will change, and so revisiting that. But one thing to think about is, how do you keep more options open? If you’re not totally sure where you want to go, how do you start taking the steps that will allow you to have some optionality, so that when you do decide, it’s not too late to go down a path you want?

How has private equity opened up new considerations for succession planning?

It used to be that a private equity firm was going to buy 80 percent to 100 percent of your business. They were going to lever it up; you no longer were the control person. If you retained 20 percent, it was really so you could get a second bite of the apple when they resold the business. But private equity has shifted a bit to have longer fund life, and even in some cases, in perpetuity. And related would be these huge, multibillion-dollar family offices operating as private equity funds and providing capital to help with generational transitions sometimes. You might have capital that comes in as a minority shareholder, which was not really a thing; there were very few firms that were doing that. That’s a bit more common now. There are firms out there that will buy 40 percent of the business and not put any more debt on it, and that capital may stay in for 15 or 20 years—or forever.

Another dynamic is the silver tsunami of Boomer founders reaching retirement age. What does that look like, and how does that inform the dynamics here?

Back to private equity, we’re seeing this on the small business front. You’ve seen private equity go into all these HVAC businesses: it used to be, if you had a small business like that, you probably just wound it down when you were ready to retire. Now you can capture this multiple that you’d never thought was going to be possible. Given what’s happened in private equity, given what’s happened in the world of search funds, there’s more and more exit opportunities for small businesses—and there should be, given the fact that there’s going to be many more small businesses where you have founders who are reaching retirement age, and they may feel like they have a choice now where before they didn’t. Now they can sell to somebody, or they can say, ‘Wait, there’s a lot of value here. I’m going to do something else and pass this business down to my employees or my partners or something else.’ This is something that is happening at a rate much higher than has happened in the past.

Is there any additional advice you would share with small-business owners about how they should be approaching succession?

This is going to sound so trite, but I would say, be open minded. One of the things that gets celebrated in the world is, ‘I built this company and sold it for a pot of money’—but instead of just defaulting to that, think about, ‘Hey, what am I really trying to do here? What would my life look like if I actually had this pot of money?’ That idea of open-mindedness and not rigidly defaulting to one pathway up front, during that exploration phase, is the most important thing.