When an advisor mentions “succession,” what some clients hear is “death,” cautions Grant Robinson, a director at the SuccessCare Program in Guelph, Ont., which offers succession coaching, seminars and workshops for business owners and their advisors.

“When you work with clients, you have to find out what’s important to them,” he says. He compares the initial conversations revolving around the future of the business with deep-sea fishing: “You put down different lines at different levels with different baits, and see what bites.”

By first finding the client’s hot spot — the area that he or she finds most compelling — you can begin to draw up a plan that addresses whatever issues or challenges might be linked to this area. Taking the emotion out of the discussion is the only way to move it forward, says Robinson. And clients should be made aware of this early on in the process.

“People get emotional about their decisions,” says Scott Hayman, executive vice president and head of client services at Northwood Stephens Private Counsel in Toronto. The key is to present clients with all the choices — and the possible repercussions — and then let them make the decision.

For instance, clients should be aware that selling the business to someone they know can be a double-edged sword, says Andrew Pigott, business valuator and transition consultant for the Succession Bridge in Oakville, Ont. The advantages include familiarity; insiders probably will understand the business more intimately, so business continuity won’t be as much of an issue. And there’s the trust factor, he says: “Insiders are often prepared to make some assumptions that a third-party wouldn’t make.”

On the flip side, without the deep pockets of a private equity group, financing becomes much more challenging. The seller essentially has to look to the future earnings of the business for his or her payout. “It’s more of a leap of faith,” Pigott says.

Retirement, he adds, might be a little less relaxing than an owner anticipated: “When you sell to a management team or to kids, you shoulder some of that responsibility.” — WENDY CUTHBERT