Christopher Riegg is a certified public accountant (CPA) and chartered financial analyst (CFA) who has spent more than three decades advising business owners and executive teams on strategic and financial matters. He earned his bachelor of business administration from the University of Wisconsin-Milwaukee and his master of business administration from Marquette University. Early in his career, he served as an audit supervisor at JPMorgan Chase and later as vice president of capital markets with US Bank’s Milwaukee offices and managing director of the investment banking firm L. William Teweles & Co. Since co-founding the Cincinnati investment banking firm Promontory Point Capital in 2003, Christopher Riegg has advised more than 200 business owners and executive teams across manufacturing, technology, distribution, and other industries on mergers and acquisitions, succession planning, debt restructuring, and recapitalization, giving him firsthand insight into the challenges of ownership transfers.
Transferring ownership of a business is one of the most important decisions a business owner will make, whether the transition involves passing the company to family members or selling to outside investors. A successful ownership transfer preserves the legacy of the company while also ensuring operational continuity. Unfortunately, there are several challenges that crop up in transitions. How business owners navigate them will ultimately determine whether a transition will be successful or not.
The first major challenge in ownership transitions is the emotional attachment many founders have to their businesses. For years, owners invest time, money, and energy into building a company. It is not just a business to them; it is part of their identity. This makes it difficult for them to step away from it. Incoming leaders may also feel a weight of expectation when taking on the new business.
In a business transition, emotional connection should not get in the way of objective thinking. In fact, emotional decision-making can delay important conversations, leading to poor planning. This is why experts recommend involving experienced financial advisors in business transitions. Advisors provide an independent perspective and help guide transition planning.
Preparation is another critical factor in a successful transition. Many business owners wait too long before planning their exit, assuming the process will happen quickly. In reality, ownership transitions often take several years to complete. Proper preparation includes improving financial reporting, strengthening management teams, evaluating market conditions, and identifying potential successors. Businesses that begin planning early achieve better valuations and stronger outcomes. On the other hand, those that delay preparation have less negotiating leverage and fewer buyers, leading to less desirable outcomes.
Clear communication also plays a major role during transitions. Employees, customers, and suppliers may become uncertain when ownership changes occur. There could even be rumors that damage the business. Owners should communicate a clear vision for the transition, reassuring stakeholders about continuity and the value of the relationships they have built over the years. This helps build stakeholder confidence in the process.
Clear communication is also integral to preventing conflicts around roles. Problems often arise when former owners remain too involved in daily operations or when successors are not given enough authority. A successful transition requires past and future leaders to meet and delineate each side’s responsibilities. There should be a clarity about authority and decision-making as well as structures for accountability.
Financial considerations are equally significant in ownership transfers. Business valuation, tax planning, and deal structure can affect the final outcome. Owners who fail to evaluate these factors early may face unexpected financial complications. Hence, it is important for business owners, especially those who do not have a financial background, to involve strategic advisory firms in their succession planning. Qualified advisors understand how markets calculate a business’ value as well as how different business structures affect outcomes. They help business owners identify and promote value drivers while correcting undesirable aspects like high debt. They further support the owners in preparing their businesses for negotiations before formal transactions begin.
Another impediment to successful business transitions is loss of institutional knowledge. Much of a company’s success depends on relationships, operational nuances, and industry expertise. These do not show up in financial statements but are integral to the effectiveness of a brand. A structured knowledge-transfer process ensures that such information is passed to new leadership, reducing disruptions later on.
Business ownership transfer is a long-term strategic process. Companies that approach succession with professional guidance are more likely to achieve stability and continued growth. Advisors like Promontory Strategy Group work with business owners to help them evaluate their transition alternatives, settle on an appropriate one, and then plan beforehand for it. Promontory also works with business owners throughout the process, optimizing outcomes for leadership and business stakeholders.
About Christopher Riegg
Christopher Riegg is a Milwaukee-based certified public accountant (CPA) and chartered financial analyst (CFA) with more than three decades of experience in investment banking and financial advisory. He earned his bachelor’s degree from the University of Wisconsin-Milwaukee and his MBA from Marquette University. Since co-founding Promontory Point Capital in 2003, he has advised more than 200 business owners and executive teams on mergers and acquisitions, succession planning, debt restructuring, and recapitalization. He is also an active member of the Association of Corporate Growth.