How to prepare your business for the next chapter
A message from: FENNEMORE
For many founders, being indispensable is part of what makes a business successful.
Okay, but: A company can become harder to scale and more difficult to transition when authority, customer relationships, and institutional knowledge all rest with one person.
What you're missing: Succession planning — well ahead of selling or retiring — is critical for business owners who want to leave a lasting legacy.
Why now: An estimated 6 in 10 business owners across the U.S. plan to retire or sell their businesses within the next 10 years, according to the Colorado Office of Economic Development and International Trade.
- But only 15% of businesses are passed down to the next generation, and 20% of listed businesses sell, leaving many owners without the chance to benefit financially from decades of hard work.
Plus: These stats are especially relevant here in Colorado, where nearly half of small-business owners are 55 or older.
- Colorado is nearing a major handoff as many founders consider what's next.
The challenge: Many business owners are not adequately prepared for these types of transitions.
- Legal readiness is an often overlooked part of the equation.
- A business may look successful from the outside, yet still face uncertainty around ownership, authority, key contracts or unresolved issues.
How it's done: Owners who plan early and strengthen their legal foundation create more options for themselves, their employees, and their business.
According to Fennemore Mergers & Acquisitions attorney Nicholas Thompson, successful founders should focus on…
- 👍 Clear leadership and authority: Governing documents and day-to-day practices establish who can make decisions, sign contracts, approve spending, and lead the business.
- 🤝 Operational redundancy: A capable management team can keep the company moving if the owner is unavailable, retires, or sells.
- 📋 Practical governance: Clear roles, voting procedures, and dispute-resolution provisions can help avoid internal conflict as the business grows or ownership changes.
- 🙋 Leadership incentives: Compensation, retention, and succession arrangements can help key leaders stay engaged through a transition.
- 👐 Durable customer relationships: Contracts and revenue streams are connected to the company, not solely to the founder's personal relationships.
- ⚖️ Clean legal foundations: Before a buyer begins diligence, core documents should be organized, including ownership records, operating agreements, intellectual property, and key contracts.
Next steps: Start preparing for a transition before a buyer is at the table or you're ready to retire.
Fennemore, one of the nation's fastest-growing business law firms, represents companies at every stage of growth, from formation through mergers, acquisitions, financings, and beyond.
The takeaway: Owners who create leadership depth and sound legal foundations can protect the business they've built, strengthen it today, and preserve more value for whatever comes next.