A Succession Story

Observing why more African American female dealers are needed, Walker Martin says, “It leads to more diversity and different perspectives, which have a huge impact in our changing world.”

Planning the Succession
Walker and Walker Martin began working on a succession plan 10 years ago to create a smooth transition for the change in ownership, which is the only way to ensure a business survives its founder. “I always tell my friends that we believe we are immortal,” Walker says. “That belief sometimes results in people being unprepared.”

The two offer some basic questions entrepreneurs should ask before planning a succession:
– How much money will it take to keep this business going?
– Where will that money come from?
– What are the tax liabilities?
– Who will be in charge of making sure the plan is followed?

Another key point to look at is how a business owner should groom someone to take over a business. Walker offers some grooming tips:
– Make sure the person has an interest in the business and wants to be part of it.
– Provide classroom and on-the-job training.
– Make sure the business is financially stable and know where the money is.
– Teach your successor how to surround themselves with good people and how to treat those people once they are hired.
– Teach them the importance of giving back to the community.

In Walker’s case, he’s working to leave a debt-free business. He plans to achieve that through estate planning, life insurance, and a trust that is set up to cover estate taxes with a second-to-die life insurance policy. This is a type of life insurance on two people that provides benefits to the heirs only after the last surviving policy holder dies. If her father leaves the dealership debt free, Walker Martin says that will create one less stress that she will have to deal with. “You don’t want to leave things undone,” she says. “That’s something that benefits me in the long run as far as trying to keep the business open.”