- 2 hours ago
- 7 min read
Step 2: Understand the Business Owner Objectives
Why the best succession plans start with what matters most to the owner
By Fiona Ettles, Partner at FinConnect
When people think about succession planning, they often assume the hardest part is working out the value of the business. That matters — but it's only half the picture.
Step 1 establishes the commercial foundation: what is the business worth?
Once that number is clear, a second and often more important question emerges.
Step 2 establishes the personal foundation: what does the owner actually want?
Because succession planning is rarely just a financial transaction. It's personal.
For many owners, the business represents decades of work, sacrifice, relationships, identity, and pride. It may have supported a family, created careers for staff, served generations of clients, or become a respected name in the community.
Two businesses can have the same valuation and the same succession options yet take completely different paths because the owners have different objectives.
Some owners want to maximise price.
Some want to protect staff.
Some want to preserve their name and legacy.
Some want to remain involved.
Some simply want freedom and less pressure.
Until those objectives are clear, it is difficult to build the right succession plan.
Why owner objectives matter
We often see succession plans stall because everyone focuses on the mechanics first:
What is the business worth?
How much equity should be sold?
What are the tax implications?
How will it be funded?
These are all valid questions. But they come after the bigger question:
“What outcome is the owner trying to create?”
Without this clarity even a well-structured transaction can go wrong. We’ve seen owners walk away from higher offers because the buyer would dismantle the team or absorb the brand. We have also seen owners reject internal succession opportunities because what they really wanted was a clean exit.
Neither decision is wrong.
The issue is not the objective. It’s failing to identify it early.
Legacy matters more than many owners admit
We worked with a business owner for whom legacy was central to any succession outcome; not as a vague sentiment, but in very specific ways.
The business name mattered to him. He didn't want to see it absorbed into another firm. Location mattered too. While the practice was primarily based in Melbourne, he regularly visited a shared office interstate, a connection that had grown from their family ties and developed into a valuable second client base. A purely commercial buyer might have viewed this differently. Post-COVID, many would prefer to service those clients remotely and rationalise the footprint. But that would not have honoured what he had built.
When we first met, he had recently turned 55 and recognised it was time to start planning his own future, not just helping clients plan theirs. He assumed the two advisers in his business had no interest in ownership, simply because they had never raised it. That assumption turned out to be wrong.
Within twelve months, one adviser had purchased 20% equity. Today the business is moving toward shared ownership, with a clear pathway for a second adviser to step in over time.
Because planning started early, the owner had the time and space to communicate what mattered most: preserving the name, maintaining both locations, transitioning clients carefully, and protecting the culture he had spent decades building.
That is the value of understanding your objectives before you are under pressure to act. You get to shape the outcome, rather than accept whatever the market happens to offer.
Sometimes the goal is not more money. It is sharing the load
We worked with a sole-owner accounting firm that had grown quickly into a substantial practice. And like many founders, the business had originally been built for lifestyle and independence after leaving a larger firm.
But success brought new pressure.
The team had grown to more than ten staff, profits were strong, and the owner had become increasingly aware of key person dependency. His objective was no longer just financial return; he wanted someone to share the responsibility.
One manager had been identified early as a potential future owner. Once the discussion was raised, they moved quickly and acquired 10% equity each year.
Two years later, the founder became seriously ill and was uncontactable for six weeks. During that time, the 20% shareholder stepped up, led the business, supported staff, and ensured clients were looked after.
When the founder returned, he knew the prior succession planning had protected the business. Without delegated authority, clear pathways, and shared ownership, the outcome could have been very different.
Sometimes succession planning is not about exiting. Sometimes it is about building resilience while you are still very much in the business.
Some owners want to stay involved, just differently
Not every owner wants to disappear on settlement day.
We worked with a business owner nearing retirement who had spent decades building deep client relationships. Her priority was straightforward: she wanted to transition ownership to advisers who would genuinely care for the people she had looked after for years. But she also wanted to remain connected to the business in a lighter, more enjoyable way.
Over the years, the firm had developed a wonderful tradition of annual wine tours with clients across regions like the Hunter Valley, South Australia and Tasmania. Her vision for retirement wasn't total separation. It was something more like an ambassadorial role: attending client events, hosting those tours, remaining part of the culture, and watching her legacy continue in good hands.
The path wasn't straightforward. An early succession candidate proved not to be the right cultural fit, and the plan paused. Then two, future employees approached her independently, at different times and without knowing the other had done the same, each expressing a desire to one day own a business just like hers.
Together, we built a new succession plan. Importantly, it addressed not just the mechanics of ownership transition, but the owner's future role within the business she had built.
This is more often overlooked than it should be. Most succession plans are structured around how an owner exits. Far fewer ask a more important question: how does the owner want to continue belonging?
If price is the priority, that is fine too
We also worked with an owner whose objective was simple: maximise the sale price. There is nothing wrong with that. In an external sale, price may absolutely be the key priority.
We helped summarise the client base, analyse likely market appetite, and provide a realistic value range. The owner believed offers would be higher because of the quality of his clients, which included medical professionals, senior public servants and elite sports professionals. That quality certainly mattered. But even premium client bases operate within commercial constraints. Buyers assess acquisitions through factors like debt serviceability, payback period, transition risk, and profitability after handover.
The offers received were strong and sat at the top end of the expected market range. The owner rejected them and withdrew the business from sale. Years later, the business is still operating under his ownership.
The lesson is worth taking seriously. If price is your priority, it needs to be grounded in market reality and planned for early. That gives you time to improve the metrics buyers actually pay for, and to transact when you are genuinely ready.
Objectives often change over time
This is one of the most common things we see. An owner begins by saying they want the highest possible price. Two years later, after thinking more deeply, the same owner says they would like their staff looked after, or that they no longer want to work full time but are not ready to leave completely, or that they would prefer to sell 20% now and transition gradually.
That is entirely normal. Succession planning is not static because people are not static. Good planning builds in room for objectives to evolve.
Questions every owner should ask themselves
Before settling on any succession pathway, it is worth reflecting carefully on what matters most. The following questions are often more revealing than any valuation spreadsheet.
On finances: do you need maximum value, or simply enough value? Do you prefer an upfront payment or staged income over time? What does retirement actually require, in practical terms? It’s important to note that someone buying your business pays a market price, and it’s not their job to solve your retirement funding gap – this is what planning is for.
On lifestyle: do you want out completely, or just less responsibility? How many more years do you want to work? What would your ideal week look like?
On legacy: does the business name matter to you? Do you want your staff retained? How important is continuity for your clients?
On identity: who are you without the business? Would you find meaning in remaining involved in a smaller, lighter role?
On timing: if you do nothing for the next three years, what changes?
The best succession plans align both foundations
The strongest outcomes tend to balance two things.
The commercial foundation covers what the business is worth, how a transaction can be funded, and what the market can realistically support.
The personal foundation covers what the owner wants their future to look like, including their role, their team, their clients and their legacy.
When both foundations align, transactions feel smoother, relationships hold, and owners feel settled in the path they have chosen. When they do not align, even a financially strong deal can leave an owner feeling like something important was lost.
Step 2 of Internal Succession Planning
Understanding owner objectives is the bridge between valuation and action. Step 1 tells you what the business is worth. Step 2 tells you what the business is for.
If you are ready to start that conversation, book a call with us here or if you haven’t already download our Internal Succession Guide to explore the process in your own time.
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