Succession Planning in an Era of Uncertainty: Why Now Is the Time to Act

By: Mike Schmitt , Rubra Group

If there’s one constant in today’s business environment, it’s uncertainty. In recent years, family businesses have faced a series of global and domestic disruptions—from the pandemic and supply chain challenges to the rapidly changing political landscape in the U.S. Tax policies are shifting, inflation is on the rise, and many business owners are finding themselves caught in an unpredictable economic environment.

For family-owned enterprises, these uncertainties underscore a critical need: having a solid succession plan in place. A well-thought-out succession strategy ensures your business will not only survive but thrive across generations, no matter what economic or political changes arise.

Why Succession Planning is Critical in Times of Uncertainty

When we look back at the global events of the past few years—COVID-19, inflation concerns, and an uncertain regulatory landscape—it becomes clear that family businesses need to plan for the unexpected. For family-owned businesses, succession planning is more than just a way to transfer ownership; it’s about safeguarding the family’s legacy, values, and wealth during challenging times.

A strong succession plan addresses both the leadership transition and the family dynamics that accompany it. And with recent disruptions highlighting just how volatile the business environment can be, having a plan in place is more essential than ever.

What’s Changed? Key Factors Driving Urgency in Succession Planning

Several factors have recently intensified the need for family businesses to prioritize succession planning:

1. The Impact of the Pandemic

The COVID-19 pandemic was a wake-up call for many businesses. It exposed vulnerabilities and reminded us that life can change unexpectedly. For family-owned enterprises, the pandemic also presented unique challenges in terms of leadership transitions. What if a key leader is suddenly unable to serve? What if the next generation is not prepared to take over?

Now, more than ever, succession planning must account for contingency plans in case of health emergencies or sudden leadership changes. A clear plan ensures continuity even in the most challenging circumstances.

2. Economic Uncertainty and Inflation

Inflation and rising costs are front and center in the current U.S. economic landscape, adding pressure to family businesses. From raw materials to labor, the cost of doing business has risen sharply. Families who may have previously put off succession planning are now realizing the financial risks involved in delaying these decisions.

Succession planning helps address not only leadership transitions but also wealth preservation strategies, ensuring the family business is protected from rising costs and other financial pressures. This can include strategic decisions on investments, cost management, and financial planning for future generations.

3. Changing Tax and Regulatory Policies

With upcoming elections, tax and regulatory changes are on the horizon. Shifting policies around estate taxes, capital gains, and wealth transfers may significantly impact how family businesses transition ownership and manage their wealth.

Succession planning needs to account for these potential changes, and it’s essential to regularly review and update the plan in response to new legislation. Working with advisors who understand both family dynamics and the legal and tax implications of business transitions is crucial in today’s landscape.

The Key Elements of an Effective Succession Plan

A solid succession plan is about much more than deciding who will take over the business when the current leader steps down. It’s about ensuring continuity, stability, and long-term growth for your family business. Here are a few key elements of a strong plan:

1. Leadership Development

Identify and nurture the next generation of leaders early. It’s essential to equip them with the skills and experience they’ll need to continue driving the business forward. Developing future leaders can involve formal education, mentorship, and giving them increasing responsibilities within the company.

2. Family Governance

Family businesses face unique challenges when personal relationships and business dynamics overlap. Establishing clear governance structures—such as a family council or advisory board—helps align family members’ expectations, resolve conflicts, and ensure transparent decision-making.

3. Financial Planning and Wealth Preservation

A succession plan should include strategies to minimize tax liabilities and preserve wealth for future generations. This can involve estate planning, life insurance policies, and developing strategies for wealth distribution that balance the needs of the business and the family.

4. Contingency Planning

Unexpected events, such as health crises or sudden leadership vacuums, must be planned for. A contingency plan ensures that there’s always someone ready to step in temporarily or permanently if needed. This type of foresight can protect the business from being caught off guard by unforeseen challenges.

The Rubra Group’s Approach to Succession Planning

At Rubra Group, we understand that the stakes are high when it comes to ensuring your family business’s success across generations. Our four-step process—Comprehensive Assessment, Strategic Alignment, Operational and Family Goal Integration, and Execution Excellence—has helped countless families transition smoothly, preserving both their wealth and their family’s core values.

Succession planning doesn’t just protect the business—it protects family relationships, ensures a shared vision for the future, and prepares the next generation to continue the family’s legacy.

With so much uncertainty in the world today, there’s no better time to begin or revisit your succession plan. Whether you’re preparing for a leadership transition in the near future or simply want to secure your family’s long-term success, Rubra Group is here to help.

Take Action: Start Your Succession Plan Today

Don’t let uncertainty dictate the future of your family business. Let’s work together to ensure that your family’s hard work, wealth, and values are preserved for generations to come.

Thank you for being a part of the Rubra community, and I look forward to helping your family business thrive in any era.

Warm regards, Mike Schmitt Founder, Rubra Group Author of Family Fortune: Preserving Wealth, Legacy, and Harmony Across Generations

If you would like to read our recent book you can access it here: https://a.co/d/3ElVkOn

If you would like to have a conversation with Mike Schmitt please feel free to schedule a meeting with him here: https://meetings.hubspot.com/mike2616