Taft Stettinius & Hollister helps clients succeed with business transfers

By Ginny McCabe

The law firm of Taft Stettinius & Hollister believes a business succession plan will help business owners succeed, whether they have a goal of going to a publicly traded company, selling the business, retiring and leaving the business legacy to family members or setting up a stock option plan to incorporate key employees.

Partner Dave Reed of Taft Stettinius & Hollister’s Dayton office says succession planning is one area in which the firm specializes, adding substantial value for clients.

“That’s an area where I find that business owners really don’t know where to start because many business owners only do it once in their careers,” Reed says.

A business succession plan may involve selling the company or coming up with a way for employees to buy the company, he says. Succession might be transferring the business to your children. Succession could mean selling off one division and allowing another division to be bought out by employees. Those are a few examples.

“I’ve represented business, both in the real estate area and operating companies for 25 years, and in doing so I’ve seen different ways in which companies have been successful. And it’s not always the same structure or the same approach that makes companies successful,” says Reed, who specializes in business and finance with a focus on real estate.

Taft Stettinius & Hollister practices across a wide range of industries in virtually every area of law, including business and finance, business restructuring, bankruptcy and creditor rights, environmental, health and life sciences, intellectual property, labor and employment, litigation, real estate, tax and private client.

Reed says the firm is currently seeing a tremendous amount of activity around business transfers. One reason for the increased volume revolves around demographics of Baby Boomers who are looking to exit.

Another prominent factor is that about from 2008 to 2013-2014 there was a lot of uncertainty among business owners. There weren’t as many transfers going on and there weren’t necessarily as many interested buyers. As a business owner, many also felt they weren’t going to get the best price for their business, Reed says.

With business succession sometimes the succession involves an outright sale of the business. Other times it is structuring the transfer of the business to employees who will buy the business out, or leaving it as a legacy to the next generation of family members.

Businesses that are the most prepared for business succession start planning well in advance of the date they want to sell or exit the business, Reed says.

They also often focus on three key areas, he explains, which help to guide them in the process.

No. 1, he says, they potentially maximize their own return because they’re working on making their business more marketable, cleaning it up and making sure that the business records are in order, making sure the finances are in order and everything related to the business is in good order. Sometimes, that can take a couple years to get a business positioned optimally for a sale. But by starting early a business owner can maximize his or her return.

Another factor that enters the decision-making process is that business owners are very proud people; their business is an extension of who they are and they want to see it succeed. Aside from the financial aspects they want to see it succeed even after they leave or retire. Often, the first generation is the one that knows everything about the business. They know the business from top to bottom and how to best run it.

“You can’t just hand the keys to somebody overnight. So planning for and preparing the next generation of leadership is part of the succession planning process,” Reed says.

The third thing is determining who the potential buyer will be. For many business owners it’s not just about getting the biggest dollar or not just having one possible buyer it’s really evaluating—who is the best, next group to run this company?

“The No. 1 price tag for a business is generally selling to a publicly traded company. That’s usually the best from a pure-dollar return standpoint. Second is typically selling to a competitor because they are looking to buy market share. Third is selling it to any other potential purchaser out there who wants to expand their line. The fourth is typically employees and the fifth is children or the next generation,” Reed says.

Based on his experience with clients, he says, succession planning is not always a purely dollars and cents decision.

Reed advises businesses to start planning five to 10 years in advance of when they hope to institute a sale, or another succession of the business.

“Unfortunately, we see too many businesses start the planning process late. They decided it’s time to sell but they haven’t spent much time getting the business packaged for a sale, nor have they thought about all of their options,” Reed says.

Reed says the process should involve a team of experts, including an attorney. It should also involve an accountant that is experienced in planning for the sale of a business. In some cases, it may involve a business broker who can help in terms of finding the right buyer, or making sure the business is positioned to get the maximum value.

Founded in Cincinnati in 1885, Taft Stettinius & Hollister offers breadth and depth of legal services coupled with a trusted business perspective to help clients reach their goals, Reed says.

Taft Stettinius & Hollister is ranked among the U.S. News Media Group “Best Law Firms.” Taft received 10 national Tier 1 rankings, and Tier 1 rankings by metropolitan area in 84 practice areas.

Under the leadership of Fred Ungerman Jr., partner-in-charge, Taft Stettinius & Hollister’s office in Dayton has been serving the business community in the Dayton region since 2004. A group of about 24 attorneys who serve the firm represent the business community in the Dayton region, and roughly half of them act as partners. The firm’s downtown Dayton office is headquartered in the Kettering Tower at 40 North Main St., Suite 1700. For more information, visit

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